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NJ’s Tax Policies Trigger Highest Outmigration Nationwide

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the staff of the Ridgewood blog

Trenton NJ, Senator Steve Oroho (R-24) is again calling for action on fiscal reforms, in light of three recent reports that prove that New Jersey’s high cost of living and bad tax policies are forcing people of all ages, and business owners, to leave the Garden State in droves.

The most recent report, released by WalletHub on Jan. 14, named New Jersey as one of the worst places in the country to retire. The NJBIA’s 2018 Regional Business Climate analysis also ranked New Jersey as one of the least innovative and business-friendly state in the region. Additionally, United Van Lines, a national moving company, also released a survey earlier this month identifying New Jersey as the number one state for outmigration.

New Jersey’s property taxes and the cost of living are the highest in the nation.

“These reports tell us what most of our neighbors already know – we live in one of, if not the most unaffordable state in the nation,” Oroho said. “New Jersey’s current tax policies are causing our family and friends, in particular retirees, to flee the state in record numbers. We must implement prudent fiscal policies to stop this mass exodus and keep what little revenue we have from disappearing entirely.”

Senator Oroho is a co-chair of the bipartisan New Jersey Economic and Fiscal Policy Workgroup, which is committed to pinpointing fiscal ineffectiveness and proposing commonsense reforms.

Oroho successfully advocated to increase the tax free retirement income exclusion as well as eliminate of New Jersey’s estate tax.

“Despite our best efforts to get the state’s spending back on track there is much more work to be done,” Oroho added. “We want to enact policies that will allow grandparents to be able to stay in New Jersey and watch their grand kids grow up. We want to create an economic climate where young parents can find good opportunities, so they they can actually afford to raise a family in New Jersey. We can and must do more to create friendlier tax policies that will slow outmigration and make New Jersey more competitive.”

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Shutdown or Not It’s Still Tax Time

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the staff of the Ridgewood blog

Ridgewood NJ, Many New Jersey residents are familiar the SALT deduction limitation and its negative effect on over taxes New Jersey Residents .There are many other changes in 2018 tax reform that will affect almost everyone. Always consult a CPA to address your particular tax situation .

According to Wealth management expert George Mentz ,the biggest changes for this years filings include:

  1. Larger standard deductions for married couples of $24,000.
  2. Personal exemptions are eliminated and there is no need to file for these.
  3. A new 37% top tax bracket for high earners. The Obama taxes will remain including the 3.8% Net Investment Income Tax and the 0.9% medical surtax on high earners.
  4. Estate tax exemption is boosted to $11.2 million for an individual and $22.4 million for a married couple.
  5. Child tax credit is increased to $2,000 per qualifying child.
  6. State and local tax deduction or SALT tax deduction limited to $10,000.
  7. Mortgage interest deductions can only be taken on mortgage debt up to $750,000, down from $1 million. This applies to mortgages taken out after Dec. 15, 2017. Interest on home equity debt can no longer be deducted.
  8. For charitable deductions, taxpayers can deduct donations of as much as 60% of their income, up from a 50% cap.
  9. For rules on retirement contributions, deductions, and deduction phase-outs, please consultant a professional or use updated software.
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IRS Confirms Tax Filing Season to Begin January 28

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the staff of the Ridgewood blog

WASHINGTON DC, Despite the government shutdown, the Internal Revenue Service today confirmed that it will process tax returns beginning January 28, 2019 and provide refunds to taxpayers as scheduled.
 
“We are committed to ensuring that taxpayers receive their refunds notwithstanding the government shutdown. I appreciate the hard work of the employees and their commitment to the taxpayers during this period,” said IRS Commissioner Chuck Rettig.
 
Congress directed the payment of all tax refunds through a permanent, indefinite appropriation (31 U.S.C. 1324), and the IRS has consistently been of the view that it has authority to pay refunds despite a lapse in annual appropriations. Although in 2011 the Office of Management and Budget (OMB) directed the IRS not to pay refunds during a lapse, OMB has reviewed the relevant law at Treasury’s request and concluded that IRS may pay tax refunds during a lapse.

The IRS will be recalling a significant portion of its workforce, currently furloughed as part of the government shutdown, to work. Additional details for the IRS filing season will be included in an updated FY2019 Lapsed Appropriations Contingency Plan to be released publicly in the coming days.
 
“IRS employees have been hard at work over the past year to implement the biggest tax law changes the nation has seen in more than 30 years,” said Rettig.
 
As in past years, the IRS will begin accepting and processing individual tax returns once the filing season begins. For taxpayers who usually file early in the year and have all of the needed documentation, there is no need to wait to file. They should file when they are ready to submit a complete and accurate tax return.
 
The filing deadline to submit 2018 tax returns is Monday, April 15, 2019 for most taxpayers. Because of the Patriots’ Day holiday on April 15 in Maine and Massachusetts and the Emancipation Day holiday on April 16 in the District of Columbia, taxpayers who live in Maine or Massachusetts have until April 17, 2019 to file their returns.
 
Software companies and tax professionals will be accepting and preparing tax returns before Jan. 28 and then will submit the returns when the IRS systems open later this month. The IRS strongly encourages people to file their tax returns electronically to minimize errors and for faster refunds.

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New Jersey Financial Literacy Education Bill Signed?

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the staff of the Ridgewood blog

Jersey City NJ, does anyone find the humor in the very idea that the financial illiterates in Trenton have signed a bill requiring “financial literacy” to be taught in schools?

Perhaps it should be a required coarse for the Governor and the state assembly . Dare we even go so far as to say even ex-governors should be forced to take the starting with former governor Whitman.

Acting Governor Sheila Oliver signed legislation (A-1414) requiring school districts to provide financial literacy education to middle school students in grades six through eight. The financial literacy instruction will emphasize budgeting, saving, credit, debt, insurance, investment, and other issues associated with personal financial responsibility to ensure New Jersey’s youth have access to the tools and foundation needed for sound financial decision-making.

“Financial responsibility is an important acquired and learned life skill and with the increasing financial challenges millennials face, it is a skill that must be a necessary part of our educational curriculum,” said Acting Governor Sheila Oliver. “Governor Murphy and I are happy to partner with the Legislature by signing this bill today to help New Jersey students learn how to effectively manage their personal finances and help set them up for success in life.”

Primary sponsors of the bill include Senators Dawn Marie Addiego and Ron Rice; and Assemblymembers Angela McKnight, Nicholas Chiaravalloti, Eliana Pintor Marin, Jamel Holley, Benjie Wimberly, and Annette Quijano.

“I am delighted the financial literacy bill was signed into law, so students can receive education on key topics that they will need for the rest of their lives,” said Senator Addiego. “We must reach people early on in life so they can plan ahead and build a foundation of financial knowledge that will help them live an independent lifestyle.”

“One of the most important lessons a person can learn is how to manage their money. Many young people go into adulthood knowing little about finances, and end up making decisions that cost them in the long run,” said Assemblywoman McKnight. “Teaching our kids early about the importance of managing their money and making sound financial decisions can prevent them from making costly mistakes and set them on the right financial path.”

“This bill would allow financial education to be infused into currents subjects, helping younger students in Jersey City and across the state get a head start on understanding the very things that will impact them every day,” said Jersey City Mayor Steven M. Fulop. “Learning about credit, investing, savings and other financial aspects are critical tools to building a foundation and setting our students up to succeed. Financial literacy is already being taught at the high school level, and we’re excited to expand this to younger students at the start of the new school year in September.”

Acting Governor Oliver signed the bill at President Barack Obama Elementary School – PS 34 in Jersey City.

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Reader says , “time is money and money is finding other places to live”

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Go west (or south) young families as leaving Ridgewood is sad but apparently, financially prudent. State and local governments have little leeway to manage their budgets given their contractual salary, healthcare and pension obligations. Population trends, prevailing taxes, and budget stress are tell tale signs that our Village and State’s financial problems are not revenue but expense related. Decades long deficits and massive unfunded pension obligations are proof that state and local fiscal strategies are out of sync.

Unlike the private sector, government wage and benefit payouts are not flexible. They increase with the passage of time. We in the Village have been served this sandwich for years and now people are moving faster to greener pastures that offer a different menu. With that said, it is encouraging that some of our state level elected officials recognize our financial crisis for what it is, as a spending problem. It would be nice to hear that locally…Our only hope is that the same political and perhaps certain union leaders will act bravely to modify current arrangements that mitigate growing budget deficits. In this matter, all interests are aligned.

Real and sustainable fiscal management is difficult to implement. It takes compromise and commitment but the resulting policy changes are not hard to understand. Some are obvious such as i) 401Ks for new hires versus a pension, ii) altering timing on pension payouts, iii) means based health care programs versus the gold standard regardless of house hold income, and iv) eliminating revenue draining white elephant projects such as municipally run/owned parking garages. (Sorry, I could not help myself.)

It is likely naive of me to hope that our leaders (again be they elected or union leaders) will deflect our current financial trajectory But it is a must because it is the only way to ensure what was contracted is delivered. A deal is a deal and we should stand by what we agreed to pay. However, all have to recognize that will be true only if there is money to pay for what was promised. The balance is we all have a line in the sand on how much more we will pay to support current services.

My comments are not intended to offend anyone. Their purpose is to be a call to action and compromise because I love it here. I enjoy my neighbors, the schools, teachers, the community, and I don’t want to bailout when my kids are off to college. I want to be apart of the solution and not just a piggy bank. I know others feel the same but we will vote with our feet if our leaders lead poorly and without reasonable foresight.

Village Counsel and union leaders, is there a willingness to make reasonable contractual changes now before it is too late or do you prefer the status quo? Your responses and actions are very powerful. Your decisions will dictate how fast our tax base erodes and how the Village will deliver on the benefits of your bargain. I respectfully suggest that your challenge is now because time is money and money is finding other places to live.

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Reader says ,”many of us are selling our homes and moving out not because we want to we have to survive”

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You know it’s a shame because so many of us love small towns and love New Jersey. But it’s just too expensive to live in the state. What the hell happened so many of us are selling our homes and moving out not because we want to we have to to survive. Especially the retirees they’re not going to give their pension checks for taxes .why would anybody do that even if they have the funds. It just doesn’t make sense.

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Reader says , “Ridgewood and other suburbs survive due to their proximity to a major city”

Ridgewood and other suburbs survive due to their proximity to a major city. Without that income coming back those suburds quickly wither.

RW has done everything it can to force Wall Street and other high paying commuters to find a different town. From ridiculous parking fees and non availability for residents to awful traffic congestion when a train comes in. Does anyone believe that this town survives without NYC workers living here ?

Come spring we are out. We will avoid large NJ state taxes, a expensive commute that just keeps getting worse, and gain back some time.

Do the math. 40k in property taxes, 2500 annual to park, 7-11% state income tax, and almost 4000 annual for NJ transit

Good luck as you lose more NYC workers

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Readers Not Buying Senate President Sweeny’s Anti Tax Stance

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Here’s the playbook:
.
1. Protest about high cost and government waste.
2. Vigerously declare that raising taxes is not the answer – become the “anti-tax guy”
3. Declare that all options were exhausted and you reluctanly must raise taxes – there is no other way and you know how mush i abhor raising taxes
4. Raise taxes according to my original plan and intent.
.
Rinse.
Repeat.

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Senator Anthony Bucco Calls on Governor Murphy to Lift People Up ,Not Pull Them Down

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the staff of the Ridgewood blog

Trenton NJ, Senator Anthony Bucco (R-25) said Governor Phil Murphy’s talk of advancing “tax fairness” is really just an excuse to tax more to spend more.

“Governor Murphy’s interest in ‘tax fairness’ is just an excuse to tax more to fund an expensive progressive agenda that New Jersey will never be able to afford,” said Bucco, the Senate Republican Budget Officer. “If the governor were truly concerned about ‘fairness,’ he would find ways to lift struggling people up by cutting their taxes, instead of pulling down those who have managed to succeed in New Jersey by increasing tax burdens that are already excessive.”

Bucco suggested cutting taxes for lower-income workers or increasing the Earned Income Tax Credit as non-punitive tax policy changes that the governor could pursue with bipartisan support.

“If the governor continues to equate ‘tax fairness’ with ‘tax increases,’ that should be seen as a clear sign that his rhetoric is nothing more than convenient cover for a money grab that would allow him to spend more.”

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Senate President Steve Sweeney : Tax Increases Not Part of the Solution for New Jersey

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the stff of the Ridgewood blog

Trenton NJ,  Senate President Steve Sweeney issued the following statement today in response to Governor Murphy’s stated attitude on tax increases:

“There is a path forward for New Jersey that fixes fiscal problems and restores economic growth but tax increases are not part of the solution. Until we make the desperately-needed structural reforms to government spending and fiscal practices, we will not consider tax increases. Ignoring the need for fiscal reforms will only allow the deeply-rooted financial practices that have plagued the state for too long to continue and become worse. Left unaddressed, we won’t have the resources or the ability to address the needs of the people of New Jersey or invest in the programs and services that can expand economic opportunities. Period, full stop.

“I am fully committed to making the reforms needed to produce real and lasting progress on the state’s fiscal practices and economic conditions. Period, full stop.”