NYC imposes a wage tax that could be used for lots more fun. Does anyone live outside of the city on paper but still rent/own someplace in the city on weekdays(or completely) to avoid this additional pain in the A and have some extra change for IDK a motorcycle?
Different Address in New Jersey for Tax Reasons
Mod Note: WSO should not be consulted for tax advice but you can use our users thoughts below as practical datapoints.
Our users shared that this is possible and is sometimes done, but there is a chance of getting caught.
First of all, user @IlliniProgrammer, a hedge fund quant, advised that it is easiest to simply live in New Jersey as you will completely avoid NYC taxes this way.
This is a strategy that you might be able to get away with if you make $100K/year. If you make $500K/year, expect to have the city tax collectors spying on you to see if you spend 183 nights/year in the city.
Tax evasion is a felony, but they'll probably just assess a 50% failure to file penalty rather than send you to jail if they catch you and it's not really egregious.
If you're going to live in Brooklyn anyways, why not just actually live in JC or Hoboken? Shorter commute, lower taxes, more open space, nicer people.
Turbotax confirms that if you live outside of NYC you are free of NYC taxes.
That being said, if you make a large amount of money (ie greater than $100 K), you will have a harder time avoiding taxes with a fake NYC address as the city will try to check that you are truly spending more than 50% of your nights at home in NJ.
User @CompBanker, a private equity vice president, shared an example of someone being audited.
He got audited and he tried to use the fact that he worked from home and traveled frequently as an excuse. They made him prove every day in which he was on the road using receipts etc. Basically-- the burden of proof is on you. At the end of the day, he got hit with the tax.
Read More About Taxes on WSO
- Bonus Tax Too Damn High
- What Percentage Of Your After Tax Income Is Devoted To Housing?
- New Tax Law - How If Affects Bonuses
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