At Work in New York City


Tax system in New York City


Home > Expat Guides > North America > Usa > New York City
Tools:


America has a city, state, and federal tax system. Tax is deducted from employees pay directly depending on your job and rate of pay. The http://www.irs.gov/ is responsible for monitoring taxes and performs audits to assure that tax returns are being appropriately paid.

Some of this tax may be rebated, or more tax may be required, in an annual accounting done by the citizens with a due date of April 15th. Large firms like http://www.hrblock.com/ and www.turbotax.com can help citizens fill out forms on-line or in-person to determine how much taxes are owed or to be refunded. If you do not have stocks, pension plans, or other investments filing your own tax return is fairly simple and it is cheapest to complete by yourself on-line. If your return is more complicated, hiring an accountant or tax specialist to go through the paper work may end up saving you money.

Some local money managers include:

Ward's Accounting Service, Inc.
681 E. 181st Street Suite A
Bronx, New York 10457
Phone: (917) 664-0508
www.wardsaccountingsvc.com/1.html

Margo's Bookkeeping Service
1577 West 4th
Brooklyn, New York 11204
Phone: (718) 627-2387
Fax: (718) 228-7121
www.margosbookkeeping.com

HARA Accounting Office
501 5th Avenue, Suite 2009
New York, New York 10017
Phone: (612) 327-3259
Fax: (866) 334-0321
www.haracpa.com

William G. Green CPA
250 South End Ave, #7A
New York, New York 10280
Phone: (917) 673-9255
www.qbtrainer.net

Another option is to search in the Yellow Pages at: http://www.yellowpages.com/New-York-NY.

Foreigners are also taxed as anyone else living in the United States if they are a permanent resident, have a green card, or if they live in the United States on average at least 122 days over 3 years. Most countries have formed a partnership with the United States to insure that their ex-patriots are not doubly taxed, but check with your own country to confirm that your taxes are paid appropriately. For more information on taxes as a non-resident http://www.irs.gov/faqs/faq13-4.html.

For 2007, the Federal tax brackets for a single (unmarried) person are:

  • 10%: from $0 to $7,825
  • 15%: from $8,025 to $32,550
  • 25%: from $32,550 to $78,850
  • 28%: from $78,101 to $164,550
  • 33%: from $164,550 to $357,700
  • 35%: $357,700 and above
  • This applies only to amounts above $8,025 (standard deduction of $5,350 plus the one personal exemption of $3,400) for an individual. For example, a single individual would actually pay 0% on the first $8,750 of income, 10% on the amount of income between $8,751 and $16,575, 15% on the amount of income between $16,576 and $40,600, 25% on the amount of income between $40,601 and $85,850, and so on.

    For a quick glossary of terms:

  • Gross Salary is the amount your employer pays you
  • W-2 wages are the wages that appear on the employee's W-2 issued by his employer each year in January. A copy of the W-2 is sent to the Internal Revenue Service (IRS). It is the Gross Salary less any contributions to pre-tax plans. The W-2 form also shows the amount withheld by the employer for federal income tax. W-2 Wages = Gross Salary less (contributions to employer retirement plan) less (contributions to employer health plan) less (contributions to some other employer plans)
  • Total Income is the sum of all taxable income, including the W-2 wages. Almost all income is taxable.
  • Adjusted Gross Income (AGI) is Total Income less some specific allowed deductions. Such as; alimony paid (income to the recipient), permitted moving expenses, self-employed retirement program, student loan interest, etc.
  • Itemized Deductions are other specific deductions such as; mortgage interest on a home, state income taxes or sales taxes, local property taxes, charitable contributions, state income tax withheld, etc.
  • Standard Deduction is a sort of minimum Itemized Deduction. If you add up all your itemized Deductions and it is less than the Standard Deduction you take the Standard Deduction. In 2007 this was $5,350 for those filing individually and $10,700 for married filing jointly.
  • Personal Exemption is a tax exemption in which the taxpayer can deduct an amount from their gross income for each dependent they can claim. It was $3,400 in 2007.
  • Local Tax

    Local government is funded by local taxes such as property taxes. Additional taxes like sales tax and use taxes are also used. For detailed information on taxes in New York State, http://www.tax.state.ny.us/ and www.nyc.gov/tax_types are helpful.

    State Income Tax: Ranges from 4 percent to 6.85 percent over five income brackets
    Local income tax rate: 2.9% to 3.6% depending on income
    Local sales tax rate: the City sales tax rate is 4 percent (in addition to the New York State sales and use tax of 4 percent and the Metropolitan Commuter Transportation District surcharge of 0.375%), for a total Sales and Use tax of 8.375 percent.

      For single taxpayers, the personal income tax:
    • 4 percent on the first $8,000 of taxable income.
    • 4.5 percent on taxable income between $8,001 and $11,000.
    • 5.25 percent on taxable income between $11,001 and $13,000.
    • 5.9 percent on taxable income between $13,001 and $20,000.
    • 6.85 percent on taxable income of $20,001 and above.

    Update 2/01/2009



    Tools:

    Facebook Twitter Google+ LinkedIn Pinterest Addthis

    Recommended Service Partners

    International Movers

    When you move internationally you are taking a big step. Lots of things are changing and you have a million things to think about and take care of. If you are able to select a top of the line moving company that moves for a modest price, it can take a big weight of your shoulders in busy times.

    Our network of international removal companies can move your furniture & possessions to Usa and anywhere overseas.

    Filling in the form at the bottom will allow you to request up to 5 quotes from various moving companies. This service is free of charge and will help you select an international moving company that suits your needs and budget.



    Do you have comments or personal information to communicate about this article? Add your comment.


    Go to the Forum to talk more about tax system in New York City, at work.


    Find more definitions and general answers on expatriation issues in the Expat FAQ (Frequently Asked Questions).