New Jersey is home to some of the highest property tax rates in the country, as well as some of the highest home values. One thing is for sure, residents of the Garden State are paying a whole lot for their gardens.
While the majority of taxpayers are aware that property taxes paid can, in most cases, be deducted on their personal income tax returns, many New Jersey residents are unaware that rent paid can also serve as a deduction.
While the rent deduction is not applicable to federal income tax returns, it is relevant to the New Jersey state filing. The ultimate tax benefit varies depending on taxable income, amount of rent paid and filing status. For tenants, 18% of rent paid during the taxable year is considered property taxes paid and can be utilized as a deduction to decrease New Jersey taxable income. The absolute minimum benefit one can receive for the deduction of rent paid is a refundable credit of $50, which certainly makes this information worth providing to your tax preparer.
For any additional information relative to the content above, or for tax filing assistance, please feel free to email me directly at firstname.lastname@example.org or call our office at 908-680-6185. Visit Mannuzza & Lamela, LLC at www.mlcpanj.com.