New Jersey Question

[JohnH]

I have a client who transferred to New Jersey last year and I have a couple of questions if any NJ preparers can help me.

1) I notice a difference of over $5K between the Fed wages and the NJ wages on the W-2. Apparently there are some items which are excludable from Fed income but not from NJ income. Can anyone name a couple of major items? I'm just curious about this and don't have a year-end check stub to work from.

2) The client tells me they don't pay auto property tax in NJ. Is that correct, or is auto property tax embedded in some other tax they pay, and can it be identified for deduction on the Fed return?

Thanks

[BobinNJ]

I have a client who transferred to New Jersey last year and I have a couple of questions if any NJ preparers can help me.

1) I notice a difference of over $5K between the Fed wages and the NJ wages on the W-2. Apparently there are some items which are excludable from Fed income but not from NJ income. Can anyone name a couple of major items? I'm just curious about this and don't have a year-end check stub to work from.

2) The client tells me they don't pay auto property tax in NJ. Is that correct, or is auto property tax embedded in some other tax they pay, and can it be identified for deduction on the Fed return?

Thanks

Probably the difference between the NJ wages and the Fed wages are most or all items in Box 12 on the W-2. NJ allows a deduction for 401K's but doesn't allow other retirement plans like 403B's or 414H's or other things like life ins. or health ins, since NJ has a GROSS Income Tax.

If the Auto property tax is a personal property tax, we don't have one in NJ. Frankly, I don't have a clue what Auto property tax is???

However, we have many other fees, etc. to nickel and dime you. Visit the New Jersey Division of Taxation web site and research Gross Income Tax and NJ-1040 Instructions.

Bob

[JohnH]

Bob:

Exactly what I needed to know.

I did look at the NJ Div of Taxation web site after posting the question and had more or less come to the conclusion that NJ doesn't exempt pre-tax medical and other such benefits. The "auto" property tax is assessed in most of the states I handle - it's an annual property tax on the value of automobiles, boats, motorcycles, etc and is deductible in the same manner as property tax on real property. ( Bad choice of wording on my original post - I should have said "Personal Property Tax")

Your response to both questions reassured me that I'm not missing anything on the return.

Thanks for the reply.

[bstaxes]

Bob is correct for the difference in Fed and State amounts. NJ does allows excess of 2% medical, alimony, and extra exemption for dependent in college. It does not allow negative amounts.

[JohnH]

Thanks again to both of you.

I studied the web site a little more and reviewed the return when it printed.

Armed with the reassurance you gave me I realized that there's not much to do here - just go with the gross and be sure the number of exemptions & property tax adjustment is right. At least the calculation is simple.