Taxes and money (in Mn)
 

Dear All,
Trying to estimate cost of living for our upcoming move to Mn and had a few questions to put to you all;

Does the US (Mn more precisely) have the equivalent of council tax? We won't be earning anything in the US, being paid and taxed in the UK instead and will only be in the US for 12 months in rented accommodation.

How much is road tax?

Are utility bills broadly similar to the UK?

Cheers,
O

Re: Taxes and money (in Mn)
 

can't give you specifics on MN - I'm in CA.

If it's any help though - most tax is income tax - of which there are two types, Federal and State. There's also social security and a couple of other things taken out - but all from income. If you're not making income here, you may skip all that excitment - perhaps that makes it easier, but US tax income taxes are pretty good vs. the UK so you might do better earning here then in the UK.

I don't have much UK experience on gas/electric bills - in SoCal I don't have to pay much for heating, my gas, which heats my water and my stove, is about $30 a month. Electricity about twice that. Decent highspeed is normally $25-$45 a month. Some rentals have utilities included. If you buy a car, expect to pay some sort of state car license fee annually, but nothing major, it's around $160 a year for me in CA.

Council tax....we have state property tax, but that's typically the home owners responsibility, not paid by a renter, in CA it's 1.1% of the property value, capped at a 3% max annual increase. When I rented, I paid my rent, and my utilities, nothing else.

The US equivalent to VAT is sales tax - which is a state rate - some States don't have any at all, most if not all are under 10%. US prices don't typically include sales tax though, so if something is stated as being $1, when you go to pay, it'll be $1 plus tax. Takes some getting use to. Obviously, that worth bearing in mind when you buy that $30k car....could be another 10% to follow when you go to pay!

Big consideration to living here if employed back home is going to be Health Insurance. Is your UK employer going to give you that? If not, it can be a massive massive expense here - and something you absolutely need.

-Matt

Re: Taxes and money (in Mn)
 

You still may have to file and possibly pay US taxes.

Re: Taxes and money (in Mn)
 

What's your visa/status in the US?

They might still want you to file and/or pay taxes, certainly file if you're actually present in the US.

If you're renting, property tax will be included in the rent.

Road tax is a bit different, there's often a town/county excise tax every year, plus annual registration costs, possibly cost of tags and inspection.

Utilities, depends on the heat source and quality of the building. In a real cold state, oil with a bit of a older building, you could easily be running $500 a month to keep hot if it's a large place, but then you could be spending as little as a couple hundred.

Cable/phone/internet can get bundle deals depending on what service is available in the area for between $100-150 a month

Rubbish collection, possibly included in the rent, or the town picks it up, or you have to do to the town dump, or you might have to arrange private pick up which will probably be around $40 a month.

If you're new to the US and don't have US credit history, expect to put down quite a lot over all for deposits, on pretty much every utility and probably more down for a rental deposit.

Medical insurance will probably be your biggest expense and you might as well think of it as a tax.

Re: Taxes and money (in Mn)
 

There's home owner's tax, but nothing if you are just renting.

We pay a car registration (or tabs) but I honestly don't know how much it is :o
There's no equivalent to MOT.
On the subject of cars, you will be required to take a knowledge and road test to get your MN licence, and you need to do this within 60 days.
Definitely have a good read of the Driver's Manual, as the knowledge test will include questions like - how far behind a school bus must you stop.
More info here - http://www.dps.state.mn.us/dvs/index.html

Utility bills - you can expect the same type of services, but obviously how much will depend on your situation. We live in an apartment where rent includes water services, as well as heat & cold air. We pay electric, phone & internet. Our cable is included in our rent, but you may also need to bear in mind there is no 'terrestrial TV' like back in the UK, so will need to factor that into your budget (unless you don't watch TV of course!).

Other taxes - sales tax is a shade above 7%. Minnesota is the only state to have no tax on clothes and shoes.

I think you'll have to still complete a tax return, so it may be worth asking for tax assistance to be part of your package.
We have an appointment for ours in 2 weeks, and I got the package of paperwork today. I very quickly thrust it back into the envelope :blink:

I know you are moving south of the Twin Cities, but If you can get a copy, I recommend Newcomer's Guide to MSP.

Re: Taxes and money (in Mn)
 

OK, from my book "Motor vehicle licences must be renewed each year. The registration tax depends on the value of your car; it will be no less than $35 a year, and could be as much as several hundred dollars. To determine your registration tax, contact Minnesota Dept of Public Safety" (this information is in the link I posted in my last post). Then there is the additional licence tabs, which seem to be just a few dollars.

Re: Taxes and money (in Mn)
 

I really would look into this bit more - many US visas mean you are resident in the US and therefore you are taxed on your worldwide income.

It would probably mean no more tax as you would complete a UK self-assessment and pay UK tax and you can deduct this tax already paid from a US tax return on the same income.

Re: Taxes and money (in Mn)
 

No idea on your income tax status, but my utilities (1 person in Minneapolis) are as follows:
Phone/Internet $60-65/month (local phone service only, DSL)
Electricity- $20-$30/month (highest in summer, when I've got electric air conditioners going)
Water/Gas/Heat - paid by landlord (fairly common in MN, I think--if you pay for heat, rent tends to be a lot lower because heat's expensive)
Television - I don't have cable or satellite. There is terrestrial TV here. I receive about eight channels, depending on how you count (ignoring the random Catholic channel and the ones that don't receive properly).
Car-don't have one. I think a bus pass runs about $90/month (mine's from the university)
Mobile-Mine's joint with my brother, so my numbers aren't good here. I also don't have texts.

Renters don't pay property tax. However, in Minnesota, you can claim a property tax refund, depending on your income. Landlords issue a "certificate of rent paid" every year, you fill in an additional form after you do your taxes and eventually (months later) the state gives you some money back. (I think it's some percentage of the portion of your rent that went to the property tax paid by the landlord.)

Re: Taxes and money (in Mn)
 

No tax on clothes and shoes in MA either, so you aren't the only one :)

Re: Taxes and money (in Mn)
 

Ah, interesting. Either something has changed, or the statement I read was a lie :lol:

Re: Taxes and money (in Mn)
 

we're taxed through the nose for everything else mind :D

Re: Taxes and money (in Mn)
 

several states have no sales tax at all, so obviously they dont pay tax on clothes either..;)

Re: Taxes and money (in Mn)
 

This would be a major red flag as it sounds like they won't be getting in on an employee scheme. Private insurance might actually cost more than federal, state, any local taxes, medicare and social security combined!

Re: Taxes and money (in Mn)
 

Well you learn something new every day! I wish I could remember where I got the info from in the first place, but it was about 3 years ago :lol:

Re: Taxes and money (in Mn)
 

In CT there is no tax on clothing priced up to $50.

Re: Taxes and money (in Mn)
 

Thanks everyone, lots of useful stuff here.

Good point about deposits; will have to budget for them too.


I'll be allowed to buy into the employer's scheme which is $250 pcm for the family with minimal overheads; I think this is pretty good though waiting to hear how they deal with pre-existing illness.

I'm on/going to be on a J1 visa which I think means I'm non-resident and should only have to pay tax in the UK. I take your point about getting good advice but I've struggled so far to find much guidance as most experience seems to be on outright emigration rather than temporary moves.

Driving test- I'm too old for that! Will start reading up now and will somehow find a way to break the news to my Wife... Thanks for the links Taffie, I'll start exploring now. (Hope you enjoyed this week's Rugby too!)

Re: Taxes and money (in Mn)
 

So I'm talking crap and meant non-immigrant... Really need to find an accountant who can handle all this sort of stuff soon. Only 2 months till we move and have managed to organise precisely nothing so far.

Re: Taxes and money (in Mn)
 

A J-1 only exempts you from certain taxes like social security and medicare, it doesn't exempt you from federal, state and city taxes. I'm guessing you wont be earning enough to be double taxed but it's better to check and see. On a side note, you would probably be better off being paid in dollars in the US because being on the J-1 you will be taxed less and you wont have the hassle of money conversion which over the course of the year will add up and will fluctuate based on the exchange rate.

On the healthcare side. If you really can buy into the companies policy then you will be covered for pre-existing conditions since you have NHS coverage and can use the last 12 months (or 18 months) of coverage to credit against any pre-existing condition exclusions. I would also double check about the actual coverage, $250 per months sounds very cheap for a family plan with little overheads. Unless it's being heavily subsidized (like 75%) or that figure is bi-weekly (which is normal) then you may find that you will actually be paying a lot more than you expect in health expenses.

Re: Taxes and money (in Mn)
 

Just called the IRS who told me i'm exempt from everything, as I was neither a citizen, nor resident alien; seems too good to be true really. I might call back and double check and this time take a name for record.
Sadly being paid in dollars isn't an option so I'm going to have to find a US bank who will give me an account without a SSN and I'll do my forex with XE.

Re: Taxes and money (in Mn)
 

I worked in NM for a year on a B1 (and later J1) visa (no SSN etc) and was paid only in the UK where I continued to pay full taxes. I was surprised to then receive a tax bill for over $17000 (Fed and State) on my return to the UK. This was covered by the double taxation treaty, so I eventually got refunds back in the UK (my company accountants filed all the paperwork for me for 2 years in both the UK and USA).

So be warned you will probably have to pay the tax bill in the USA after your return. I would seek professional advice on this whole area.

Re: Taxes and money (in Mn)
 

You aren't required to have a SSN to open a bank account, so just ask to speak to a supervisor.

They only need to have a copy of something that identifies you, so your passport is good enough.