[net.taxes] Renter's Tax Breaks

wjm@whuxj.UUCP (MITCHELL) (02/28/84)

In reply to Tim Giebelhaus' question (and to all you other folks out on the
net who wanted to but didn't ask).
NJ has a similar deal to MN, in which a tenant in NJ receives a $65 credit
against one's state income tax (the credit is $100 for senior citizens and
some other people) in lieu of property tax rebates (since one is paying
property taxes through one's rent).
This is not double taxation since this credit is not income for Federal or NJ
income tax purposes but does reduce one's state income tax.  This will
INCREASE your Federal tax since it reduces the state tax that you can deduct
but since the maximum tax rate in the USA is less than 100% you come out ahead
of the game.
Bill Mitchell
Bell Communications Research, Inc.
Whippany, NJ (whuxj!wjm)
maximum tax rate was 107% - you earn an additional pound, you pay 1 pound 7
pence to London - ever wonder why there are so many British tax exiles?)

tim@minn-ua.UUCP (Tim Giebelhaus) (03/02/84)

  I was writing you for humor.  The way it works is I get payed.  This 
money I take home with me and give part of it to the land lord.  The 
money I give him gets taxed first.  That is taxed income.  I have payed
my taxes on that income.
  Then, after a year or so, the state of MN decides that I have been paying
the property taxes on my apartment by paying rent.  They decide to give me
back the part of the rent that went to property taxes.  I have payed taxes
on this money already.  It is just that the state was playing bank for a
while (I think I should get interest on the money).  The federal goverment
isn't going to convince me to pay taxes on that income again.