Moving involves a lot of planning because there are a lot of activities involved in the process. One of the many things you will need to plan out is filing your tax returns both in the state you are leaving and in your new state of residence. Location is very important for the computation and filing of tax returns. This makes it important for you to find out how to file tax returns after a long-distance move out of New Jersey.
In the United States, each level of government levies different types of tax. State income tax is different from federal tax. Income taxes are levied at both federal and state levels. For individuals, tax is generally levied on taxable income which is the net income of individuals. State income tax is levied by the state directly on your income earned in your state of residence. There are other types of taxes that can be levied at the state level. Some examples are – payroll tax and sales tax. Many taxes are usually self-assessed. What this means is that each taxpayer calculates how much is to be paid based on the prescribed tax rates and deductions and then files with the tax returns.
Since there are state-based taxes, when you make a long-distance move out of a state, you have to stop paying those state-based taxes to your old state and start paying to your new state of residence. In the same vein, when you have made a long-distance move out of New Jersey, you will need to stop filing state-based taxes there and start filing them at your new state of residence.
When you make a long-distance move out of New Jersey, it is important to get general tax information in your new state of residence. This will enable you to avoid tax offenses. Tax offenses vary from non-compliance with tax laws to negligence. There are penalties attached to tax offenses. These penalties are mostly state-based except for federal taxes. Thus, penalties and their severity will depend on the specific tax law of the state. You must do your due diligence after a long-distance move to ensure that you comply with the applicable laws.
Taxes are computed and filed by the taxpayers. Thus, after a long-distance move, you will need to know the appropriate mode and system of filing in your new state of residence to help you file properly and avoid any tax offense. As with many other people, moving was stressful for you. Thus, we have put together a list of things to look out for when filing taxes in a new state. This list will guide you in your plan to file after a long-distance move.
- Exit tax
When you make a long-distance move out of New Jersey and you sell off your property, the state tax laws provide that you pay an Exit Tax in New Jersey. Exit Tax is two percent of the gross sale of property by people moving out of the state. The exit tax is paid regardless of whether Capital Gains was made on the property or not.
- Applicable law and administrators
When you get to your new state of residence, it is important that you get familiar with the applicable tax law of the state. Aside from the General Federal tax laws, each state has its tax laws. Knowledge of the applicable tax law is what will guide you and help you avoid tax offenses.
Taxes are administered by tax authorities. Every state has its tax administrator. You should also find the appropriate authority in the state.
- Tax rate of the state
Because states have the power to make their state tax laws, tax rates differ from state to state. Each state fixes its tax rate. Thus, when you move to a new state, you will need to find out the tax rate of the new state. Certain states do not levy tax on the income of residents. You might be surprised to find out that your new state of residence does not impose an income tax. Thus, saving you some money. Some other states make money primarily from taxes and thus have high tax rates. Others have a flat rate for taxes.
It is therefore important to find out about the tax rates of your new state of residence. This information is commonly readily available. However, you can consult with a tax consultant to get the best possible tax information in the state.
- Filing status
As earlier stated a lot of state taxes are self-assessed. Taxpayers assess and file tax returns. The tax authorities then review it and can adjust the tax returns. If you are married, you can decide to calculate the tax for you and your spouse and file jointly. If you are unmarried but have dependents in your household, then you can file as the head of a household.
- Deductions and exemptions
There are available deductions allowed on taxes generally, especially income tax. These deductions are however subject to certain limitations and the number of deductions is subject to the state tax laws. Thus, when you have made your long-distance move out of New Jersey, you need to find out the allowable deductions and rate of deductions of your new state of residence. You should do this before filing to avoid tax offenses.
- Mode of filing
In New Jersey, there are platforms available to file your tax returns electronically. Tax returns can also be filed physically. Electronic filing of tax returns is now widely used and encourages by the tax authorities. There are even available software programs for computing tax returns for taxpayers. When you get to your new state of residence, it’s important to find out the available mode for filing in the state. When you choose a mode for filing from the available modes, then register.
Thinking About Moving?
Are you thinking of moving out of New Jersey to Pennsylvania, North Carolina, Florida, South Carolina, Georgia, or some other state across the country? Hercules Movers, Inc can help get you and your belongings there safely. Call us if you are looking for a free no-obligation quote for your long-distance move at 732-324-2500 today to schedules an appointment for us to come to you.