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NJ Income Taxes

NJ Tax Amnesty Program -Running Now!

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The Clock is Ticking…NJ Tax Amnesty Program Runs Through Jan. 15, 2019  

Gift from State of NJ

Businesses and individuals with unpaid NJ tax liabilities may be able to get a break on penalties under the Amnesty Program  which is in effect from November 15, 2018 through  January 15, 2019.  The measure applies to all state taxes including  gross income,   corporate business tax and sales and use tax.  However, it does not apply to unemployment  type taxes administered by the Department of Labor.   

 Why should I do this now? Because under this limited-time offer the Division of Taxation will forgive all penalties, and one-half of the accrued interest due at Nov. 1, 2018. 

 Here are some of the details 

  • NJ Amnesty will provide relief for 2008 – 2016 delinquent individual or business tax return filers. 
  • Requests for amnesty must be filed electronically 
  • The Division of Taxation recently mailed a letter to all taxpayers who are known to have amnesty-eligible deficient and/or delinquent accounts 
  • If you didn’t receive a letter and you want to participate, you will need to register or self-report through the Non-Outreach Portal 
  • Federal tax liabilities are not included under the program 

 Is there a hitch? Sort of. The bad news is that if a taxpayer is eligible for amnesty and does not take advantage of it, an additional 5% penalty will be added to the already imposed penalties and interest on the original tax liability.   

To see if this program might be right for you, please contact our Tax Manager, Steven Citron.   

 

 

NJ Tax Amnesty: Cool Savings Despite Sizzling Summer Heat

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 Businesses and individuals facing unpaid NJ tax liabilities may be able to get a break on penalties according to the tax amnesty measure signed into law on July 1, 2018. The amnesty period will not begin before November 1, 2018 and will end by January 15, 2019. The program will apply to state tax liabilities for tax returns due on and after February 1, 2009 and prior to September 1, 2017. The measure will apply to all state taxes including gross income, corporate business tax and sales and use tax. However, it does not apply to unemployment type taxes administered by the Department of Labor. 

Why should I do this now? Because under this limited-time offer (remember, the clock runs out by January 15, 2019) the Division of Taxation will forgive all penalties, and one-half of the accrued interest due at Nov. 1, 2018. 

Here are some more details

    • The program will also apply to amounts currently under audit or being contested with the NJ Div. of Taxation.
    • A start date for the program has not yet been announced.
    • NJ Amnesty will provide relief for 2009 – 2016 delinquent individual or business tax return filers.
    • The program also forgives all penalties and 50% of interest for delinquent sales and use tax filings for quarters ending Dec. 31, 2009 – June 30, 2017.

Is there a hitch?  Sort of. The bad news is that if a taxpayer is eligible for amnesty and does not take advantage of it, an additional 5% penalty will be added to the already imposed penalties and interest on the original tax liability.

To see if this program is right for you, please contact our Tax Manager, Steven Citron

 

 

NJ Budget Increases Real Estate Tax Deduction!

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What’s In the 2019 NJ Budget…and What Does it Mean for You?

While New Jersey residents have been busy surviving the summer heat….Governor Phil Murphy and NJ State lawmakers reached a

Increased Real Estate Tax Deduction

budget deal before the commencement of the fiscal year beginning July 1, 2018.

 

  • NJ residents will now be able to deduct up to $15,000 per year of property taxes. Historically the deduction was limited to $10,000.
  • Approximately 500,000 New Jersey residents who are eligible for the Earned Income Tax Credit will see a small increase of about $53. The budget included funding for the first of a three-year increase from 35% of the federal tax credit to 40%.
  • About 70,000 State residents will become eligible for a new tax credit to help pay for child and dependent care. This credit is aimed at households with income below $60,000.
  • The State’s sales tax rate will not increase but will remain at 6.625%.
  • The budget restores $150 million to the Homestead Property Tax Relief program
  • Plastic and paper bags will be taxed at 5 cents per bag
  • NJ will begin collecting a 50-cent surcharge on solo rides and 25 cent surcharge on shared rides for Uber and Lyft

 Anything else I should be aware of?

New Jersey is planning a 90 day amnesty program through which delinquent taxpayers will have an opportunity to obtain compliance with the Division of Taxation and reduce interest and penalties on their outstanding tax liabilities.  Program details are expected at a later date.  For assistance, please contact our Tax Manager, Steven Citron.

NJ Honors our Veterans with Tax Savings

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US Veterans

New for Tax Year 2017. You are eligible for a $3,000 exemption on your Income Tax return if you are a military veteran who was honorably discharged or released under honorable circumstances from active duty in the Armed Forces of the United States by the last day of the tax year. Your spouse (or civil union partner) is also eligible for an exemption if he/she is a veteran who was honorably discharged or released under honorable circumstances and you are filing a joint return. This exemption is in addition to any other exemptions you are entitled to claim and is available on both the resident and nonresident returns.

The good

  1. you apply once and are eligible for the exemption for life

 The bad

  1. The application is submitted separately from your e-filed return.
  2. A $3,000 exemption only saves you between $42 and $269 depending on your tax bracket

 The ugly

  1. The submission form must be completed on paper and signed, and then is uploaded, mailed or faxed.

 How do I apply? Complete Veteran Income Tax exemption submission form and submit with a copy of your official discharge document, usually Form DD-214. This can be done before filing your tax return and is recommended for faster processing of your return.

More information is available on the State of New Jersey website.

http://www.state.nj.us/treasury/taxation/military/vetexemption.shtml

 

Delay of NJ 2016 refunds

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The New Jersey Division of Taxation will not begin issuing 2016 tax refunds until March 1, 2017.

Due to enhanced efforts to protect NJ taxpayers from identity theft and refund fraud, early filers could experience delays in receiving their 2016 refunds.  Tax returns filed electronically may now take a minimum of 4 weeks to validate and process.  Paper filed tax returns may take a minimum of 12 weeks to validate and process. 

To check the status of your refund click here:  Online Refund Service or call 1-800-323-4400.

Hit by the NJ Exit Tax on Sale of Real Estate? You Can Recoup Your Money

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The New Jersey “Exit Tax”, which became law in 2007, requires the real estate seller to file a GIT/REP form

Exiting NJ?

(Gross Income Tax form) in order to record a Deed for  the transfer of his property.

When a non-resident sells property, New Jersey will withhold this income tax in the amount of either 8.97 percent of the profit or 2 percent of the total selling price, whichever is higher. Therefore, even if the property is sold at a loss, tax must be withheld to fulfill the two percent requirement.

What Can I do?

It’s important to realize that while the Exit Tax requires a substantial withholding, it doesn’t have any impact on the actual tax liability. If the seller files a NJ tax return he is refunded the difference between what was withheld and what is owed. This recovery can be very significant when one factors in the selling costs and original purchase price, both of which reduce the taxable gain.

Estates Should Pay Special Attention

The recovery is often even greater in the case of real estate sold by an estate, as there is a step up in cost basis which would typically minimize a gain on the sale, often resulting in full recovery of the entire withholding. To quickly expedite the recovery of the excess withholding, it would be prudent to timely file Form NJ1040 NR (individual) or NJ1041 (estate/fiduciary).

How do I know if I am considered a “non-resident”?

So who’s considered a “resident” and who’s a “non-resident” with regard to this tax? The law defines a resident taxpayer as one of the following:

  • An individual who is and intends to continue to maintain a permanent place of abode (home, residence) in New Jersey on/after the day of transfer
  • An estate established under the laws of New Jersey
  • A trust established under the laws of New Jersey

A nonresident is simply defined as “any taxpayer that does not meet the definition of resident taxpayer.”