Will N.J. try to tax my out-of-state income?
By Karin Price Mueller | NJMoneyHelp.com for NJ.com
Q. I have a house in Florida and also a house in New Jersey. I plan to spend less than 180 days in New Jersey each year. The rest of the days will be in Florida and I will claim Florida as my residence. I am an employee of a company located in Boston. Do I need to pay New Jersey state tax on my salaries?— Taxed enough
A. When you work for a salary, you must file and pay taxes to the state within which you physically work and the state within which you reside.
Normally, if you live in one state and work in another, your state of residence allows you to take a credit for the taxes paid to the other state so that you do not pay taxes twice on the same income, said Bernie Kiely, a certified financial planner and certified public accountant with Kiely Capital Management in Morristown.
“You say you plan to spend less than 180 days per year in New Jersey. I recommend you keep records of where you sleep every night,” he said.
You should also make sure that you use your Florida address on where you are registered to vote, where your cars are registered, your life insurance, your wills, your driver’s license and more.
“Let’s pretend you are a zillionaire. New Jersey might go to great lengths to prove you are really a New Jersey resident who is trying to get out of paying your taxes,” Kiely said.
The state might look at how much your New Jersey home is worth compared to the one in Florida and where your valuables are kept, he said.
“I have a client who lives in New Jersey during the summer and Florida in the winter. He claims to be a Florida resident. His New Jersey home is worth $1 million and his Florida condo is worth $300,000. If New Jersey looked at that, it could be a problem,” Kiely said.
On your taxes, you don’t have to file a Massachusetts tax return because you don’t work there, Kiely said. You don’t have to file a Florida tax return because Florida has no individual income tax, he said. And you don’t have to file a New Jersey tax return because you don’t live there or work there, he said.
Just make sure your paperwork is in order and you keep good records of where you spend your time.
Email your questions to Ask@NJMoneyHelp.com.
Karin Price Mueller writes the Bamboozled column for NJ Advance Media and is the founder of NJMoneyHelp.com. Follow NJMoneyHelp on Twitter @NJMoneyHelp. Find NJMoneyHelp on Facebook. Sign up for NJMoneyHelp.com’s weekly e-newsletter.