homeowners: does the no state income tax offset the high property taxes? (Austin: sales, how much)

[LACAMOM]

I'm coming from California, where I'm taxed heavily on my wages and everything else you buy (sales tax). Curious...

[FromCalitoSteinerRanch]

Originally Posted by LACAMOM

I'm coming from California, where I'm taxed heavily on my wages and everything else you buy (sales tax). Curious...

It depends.

We are taxed at about 3% on an amount that is over 4 times my income. As a family with only one wage earner, we never really paid more than about 4% on our income when we were in CA.

Seems like simple math and it appears that we are "fools" for being in TX, however the type of area we live in, we could never, ever, no, not ever afford in CA on one income. Granted, we are not living on the beach, but this is our home now, and we have water, and parks, and schools much better than even Rancho Santa Margarita, and similar hilly scenary.

The kids are much more polite here, and we feel, and based on stats, ARE much safer here. If things change, and I get my car, or rims, or stereo(es) stolen, or home(s) burglarized here just like in CA, then I may be looking elsewhere, but that is just not Austin right now.

[jwb123]

Not if you came from a state without income tax previously. Like we did.

BUT, you do start to rationalize it like everyone else does.

[Jazzedforhim]

We are a family of four on one income as well. We went to hubby's check and did the math. How much is coming out in state taxes? How much will we be looking at monthly for property taxes in Austin? We aren't buying a big house so for us it was a no-brainer. We'll only be paying $100 more in property taxes taking the no state tax into consideration.

And...we have so much more home for the money. Right now we can't even afford a "home" as we are in a mobile home on rented land! There we can have a nice newer home with a lot more square footage!

[Trainwreck20]

You have to do the math. Depending on what you earn and what your appraisal here is, you can come out ahead or behind. It is very situation specific. If you earn a lot of money and live in a modest house, you will generally come out ahead. If you are a retiree in a mansion, you will come out way behind.

Btw, Sales tax is deductible here, and I understand that is the case since we do not have an income tax? Not sure on the logic, but anyway, that can add up to a few bucks in savings, as well.

[Phisch]

Sales tax is deductible? How does that work?

[Trainwreck20]

Currently, you have two choices:
1) save all your reciepts and deduct the actual total sales tax on your federla tax return
2) Estimate your sales taxes paid by using look-up tables from the IRS, based on income and location. Add on one-time large items (cars are the most common, there are others). Deduct this number from your federal tax return.

Apparently, method 1 generally comes out larger, but I am not one to save that many reciepts .

[GANKS]

It totally depends on how much your house appraises for and how much you made where you are moving from. Moving from WA where there is no income tax, the property tax was total sticker shock (I had to prepay Monday the next 10 months of taxes when we closed on our house, ouch! and I will still pay property taxes every month going forward). So hopefully I will get a nice check in January when our Escrow account is way over funded.

Sales tax has been deductable for states with no income tax for a couple years but I've heard that may go away. In the past I use the tables the IRS provides but save receipts for anyting over $500 - especially vehicles.

Overall we're going to pay $8-10K more in taxes this year than last year but we have a much larger house, better neighborhood and better school - so as JenBar says you just start to rationalize it.

[Jazzedforhim]

Originally Posted by Trainwreck20

Currently, you have two choices:
1) save all your reciepts and deduct the actual total sales tax on your federla tax return
2) Estimate your sales taxes paid by using look-up tables from the IRS, based on income and location. Add on one-time large items (cars are the most common, there are others). Deduct this number from your federal tax return.

Apparently, method 1 generally comes out larger, but I am not one to save that many reciepts .

RIGHT ON! That's a big plus for us since we pay state taxes here and cannot write off sales taxes! Yipiee!

Sell house, sell!

[Trainwreck20]

Sales tax has been deductable for states with no income tax for a couple years but I've heard that may go away

It was scheduled to go away a this year, I think, but was extended for two more years, I think?. Could have the time/lengths off, but it was extended at least through this year. Florida is another no income tax state, I think, and it helps when two large population states are lobbying for the same thing. Lots of AARP votes out there .