Sales Tax Matters in Brooklyn
Are you a business owner in Brooklyn that has fallen behind on sales tax compliance? Do you have an unfiled federal or NYS tax return?
The experienced estate planning attorneys at Tenenbaum Law can help safeguard your assets from excessive governmental taxes. Their team can handle complex tax matters in Brooklyn involving estates, trusts and residency issues.
City of Brooklyn Income Tax
New York’s state income tax rates are among the nation’s highest, and city residents pay an additional local city income tax. For high earners, these taxes can add up quickly. Fortunately, there are some loopholes that can help you reduce your NYC tax liability.
For instance, you can avoid paying personal income tax if you sell your Brooklyn home for less than $250,000 (single) or $500,000 (married filing jointly). Also, if you make capital gains from investing in property or other assets, you can shelter that money by deferring it through a nonqualified deferred compensation plan.
The main drawback of the city income tax is that there are no city-specific deductions. Instead, the tax is based on your net New York state taxable income after you claim applicable state income-tax deductions. Tax credits can offset what you owe, though.
City of Brooklyn Sales Tax
The law regarding sales tax in New York State is complex. It requires an experienced lawyer. Whether you are an individual seeking to defend yourself against an overreaching IRS auditor or a business looking to ensure that it is properly complying with the New York Department of Revenue, our firm has the experience and track record necessary to provide thoughtful counsel.
Generally, the tax rate for an item is calculated by adding together a number of rates including the New York state sales tax, the county sales tax and a local district tax. Certain goods and services are exempt from sales tax such as groceries, newspapers, laundry and dry cleaning and prescription drugs. Clothing items priced under $110 are also exempt.
New York’s property taxes are among the highest in the nation. However, there are many property tax exemptions available for individuals and businesses.
City of Brooklyn Property Tax
In New York City property taxes are based on the assessed value of real estate. A tax rate is applied to this amount in order to fund the county, city and school districts along with other special district levies.
This explains why Manhattan homeowners typically have much higher property tax bills than those in Brooklyn and other boroughs. Buying and living in Manhattan is not cheap, and a sizeable paycheck is needed to afford it.
A city commission empaneled by Mayor Bill de Blasio has proposed major reforms to the city’s antiquated property tax system. If those changes go through, homeowners in neighborhoods such as Bed Stuy and Prospect Lefferts Gardens could see their property taxes spike dramatically. The change would remove a cap that has kept property taxes relatively low for brownstone Brooklyn townhouses, even as the market in those neighborhoods has soared. The mayor owns two wood frame houses in Park Slope. His properties are valued at more than $1 million, so they would pay a much higher percentage of their market value in property taxes under the commission’s proposal.
City of Brooklyn Real Estate Tax
Whether you own or are thinking about purchasing a home in Brooklyn, it is important to understand the city’s real estate tax. The tax is calculated based on several factors including the property’s market value, class, and applicable exemptions and abatements.
A property’s tax bill is determined after the City Assessor determines its market value, subtracting any exemptions to find its taxable value. The city’s tax rate then applies to this taxable value to calculate the property’s total annual property taxes.
The process of buying or selling real estate in New York City is incredibly complicated. This is due to the various transfer taxes such as NYC’s Real Property Transfer Tax and the state’s flip tax. These taxes are generally paid by the seller and can be significant in certain cases. In addition to these taxes, the city also imposes transfer taxes on co-ops and condos. This makes it even more important for individuals to be aware of all transfer taxes that apply in the city.