NYC Tax breakdown

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WhirledWorld
Posts: 331
Joined: Wed Sep 22, 2010 11:04 am

NYC Tax breakdown

Postby WhirledWorld » Mon Oct 21, 2013 12:47 pm

Income

Salary: 160,000
Bonus: 10,000
Total Gross Income: $170,000

Taxes
New York City Income Tax (does not apply to NJ residents):
  • For married, filing jointly, excluding spouse's income: 5989.40
  • For single: 6083.60
New York State Income Tax:
  • For married, filing jointly, excluding spouse's income: 9815.5
  • For single: 10734.25
Federal Income Tax
  • For married, filing jointly, excluding spouse's income, living in NJ: 31566.8
  • For married, filing jointly, excluding spouse's income, living in NYC: 30953.63
  • For single, living in NJ: 36990.91
  • For single, living in NYC: 35287.57
Other federal taxes:
  • Social Security tax: 7049.40
  • Medicare tax: 2465

After tax income
  • Married, filing jointly, excluding spouse's income, living in NJ: $119,103.30
  • Married, filing jointly, excluding spouse's income, living in NYC: $114,790.93
  • Single, living in NJ: $112,760.44
  • Single, living in NYC: $108,380.18


Notes
  • This obviously shouldn't be taken as legit tax advice
  • Income taxes could be even lower if you tax deductions for, e.g., health expenses, business expenses, mortgage interest, etc. But after state and city taxes, most folks will be approaching the limits for the Alternative Minimum Tax.
  • If you're just deducting state income tax, married individuals should claim the standard deduction--in that case, they net $119,687.10, which is about $580 more.
  • Married individuals obviously need to recalculate with their spouse's income for this to be of much use.
  • This includes a $10,000 year-end bonus, so this gives an annual comp estimate but not a paycheck calculator.
  • This doesn't include any credits, though I don't believe any would typically apply, except the education credits in your stub year.

Please let me know if this is about right.
Last edited by WhirledWorld on Tue Oct 22, 2013 4:31 pm, edited 4 times in total.

WhirledWorld
Posts: 331
Joined: Wed Sep 22, 2010 11:04 am

Re: NYC Tax breakdown

Postby WhirledWorld » Mon Oct 21, 2013 12:52 pm

Calculations:

NYC Income tax

  • Married: 3071 + (80,000*0.03648)
  • Single: 1076 + (110,000*0.03648)
http://www.nyc.gov/html/dof/downloads/p ... n_2012.pdf

NY State income tax


  • Married pay $1938 on first $50,000 and are taxed at 6.85% on the rest, less a 15,000 standard deduction: 1938+(130000-15,000)*.0685 = 9815.5
  • Singles are taxed $972 on the first $20,000 and are taxed at 6.85% on the rest, less a 7,500 standard deduction: 973+(150,000-7500)*.0685 - 10734.25

Federal Income tax


Married pay $27735 on first $142,700 and are taxed at 28% on the rest, less the respective deductions for local taxes and a personal exemption of 3800:


  • For Married in NJ, that's 27735+(170,000-142700-9815-3800)*.28= $31,566.8
  • For Married in NJ, that's 27735+(170,000-142700-9815-3800-5989.4)*.28= $29889.77

Singles are taxed $17442.50 on the first $85,650 and are taxed at 28% on the rest, less the respective deductions for local taxes and a personal exemption of 3800:

  • For Married in NJ, that's 17442.5+(170,000-85650-10734-3800)*.28= $36,990.91
  • For Married in NJ, that's 17442.5+(170,000-85650-10734-3800-6083.6)*.28= $35,287.57
Last edited by WhirledWorld on Tue Oct 22, 2013 4:29 pm, edited 2 times in total.

Pokemon
Posts: 1862
Joined: Thu Jan 12, 2012 11:58 pm

Re: NYC Tax breakdown

Postby Pokemon » Mon Oct 21, 2013 1:16 pm

WhirledWorld wrote:Income

Salary: 160,000
Bonus: 10,000
Total Gross Income: $170,000

Taxes
New York City Income Tax (does not apply to NJ residents):
  • For married, filing jointly, excluding spouse's income: 5989.40
  • For single: 6083.60
New York State Income Tax:
  • For married, filing jointly, excluding spouse's income: 10,148.36
  • For single: 10,526.97
Federal Income Tax
  • For married, filing jointly, excluding spouse's income, living in NJ: 27,586
  • For married, filing jointly, excluding spouse's income, living in NYC: 24584.50
  • For single, living in NJ: 34,101.94
  • For single, living in NYC: 30,694.90
Other federal taxes:
  • Social Security tax: 7049.40
  • Medicare tax: 2465

After tax income
  • Married, filing jointly, excluding spouse's income, living in NJ: $122,751.24
  • Married, filing jointly, excluding spouse's income, living in NYC: $120,128.14
  • Single, living in NJ: $115,856.69
  • Single, living in NYC: $113,180.13


Notes
  • This obviously shouldn't be taken as legit tax advice
  • Income taxes could be even lower if you tax deductions for, e.g., health expenses, business expenses, mortgage interest, etc. But after state and city taxes, most folks will be approaching the limits for the Alternative Minimum Tax.
  • Married individuals obviously need to recalculate with their spouse's income for this to be of much use.
  • This includes a $10,000 year-end bonus, so this gives an annual comp estimate but not a paycheck calculator.
  • This doesn't include any credits, though I don't believe any would typically apply, except the education credits in your stub year.

Please let me know if this is about right.


IRS Circular 230 disclosure: To ensure compliance with requirements
imposed by the IRS, we inform you that any tax advice contained in this
communication, unless expressly stated otherwise, was not intended or
written to be used, and cannot be used, for the purpose of (i) avoiding
tax-related penalties under the Internal Revenue Code or (ii) promoting,
marketing or recommending to another party any tax-related matter(s)
addressed herein.

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thesealocust
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Joined: Mon Oct 20, 2008 8:50 pm

Re: NYC Tax breakdown

Postby thesealocust » Mon Oct 21, 2013 1:29 pm

Pokemon wrote:IRS Circular 230 disclosure:


180 180 180 180 180 180

User avatar
lonerider
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Re: NYC Tax breakdown

Postby lonerider » Tue Oct 22, 2013 10:15 am

.
Last edited by lonerider on Sat May 10, 2014 2:40 pm, edited 1 time in total.

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thesealocust
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Re: NYC Tax breakdown

Postby thesealocust » Tue Oct 22, 2013 10:25 am

Yep. Living in New Jersey means you're likely to get more/nicer space, pay less rent, or both as well. Commute may even be better depending on your firm and where else in NYC you'd look :lol:

WhirledWorld
Posts: 331
Joined: Wed Sep 22, 2010 11:04 am

Re: NYC Tax breakdown

Postby WhirledWorld » Tue Oct 22, 2013 4:34 pm

lonerider wrote:Pretty surprised at the small difference between NJ & NYC, when NYC taxes are 6%. Is this because these taxes are deductible from fed taxes?

Makes me rethink my idea of living in Jersey City when I graduate & start working.


Yeah, that was my bad. I messed up the math. It should be right now, though.

By living in NJ, you save about $6000 from not paying NYC income tax, less value of the deduction from federal tax.

In total, living in NJ saves you about $4300 in taxes annually.

Of course, then you have to account for NJ Transit costs and the value of your time not spent in a commute, as well as the cheaper apartments and COL generally in NJ.

Anonymous User
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Re: NYC Tax breakdown

Postby Anonymous User » Wed Oct 23, 2013 8:26 pm

This is off, right? I thought it was well-established that $160k after taxes in NYC was ~$93k?

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thesealocust
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Re: NYC Tax breakdown

Postby thesealocust » Wed Oct 23, 2013 8:38 pm

Anonymous User wrote:This is off, right? I thought it was well-established that $160k after taxes in NYC was ~$93k?


No, it's not off. It is including the calculation of a $10,000 first year bonus, but even without that 93k is well below after tax NYC takehome.

WhirledWorld
Posts: 331
Joined: Wed Sep 22, 2010 11:04 am

Re: NYC Tax breakdown

Postby WhirledWorld » Wed Oct 23, 2013 9:30 pm

Anonymous User wrote:This is off, right? I thought it was well-established that $160k after taxes in NYC was ~$93k?


This is your net annual pay, including bonuses, before things like health/dental/401k/meal plans/salary advances. Your actual paycheck will be lower.

Hutz_and_Goodman
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Re: NYC Tax breakdown

Postby Hutz_and_Goodman » Sat Oct 26, 2013 5:37 pm

Can someone help me figure out how to ballpark spouses income? If I'm making NYC standard for a first year, and according to the above my after tax is $115k, and my spouse makes 40k, what is the after tax on that? Like 25k?

WhirledWorld
Posts: 331
Joined: Wed Sep 22, 2010 11:04 am

Re: NYC Tax breakdown

Postby WhirledWorld » Sun Oct 27, 2013 12:20 am

Hutz_and_Goodman wrote:Can someone help me figure out how to ballpark spouses income? If I'm making NYC standard for a first year, and according to the above my after tax is $115k, and my spouse makes 40k, what is the after tax on that? Like 25k?


Assuming you both claim the standard deduction, you start off with 119,687.10 after taxes. Then you just add your wife's income at the marginal tax brackets:

You'd pay 6.85% of the 40k to NY/NJ State income tax = 2740

1.45% to the Medicare tax = 580

6.2% to Social Security on the spouse's income = 2480

If you live in the city, you pay 3.648% on the 40k to the NYC income tax = 1459.20.

28% of the 40k (less 3800 for your spouse's personal exemption) to the federal government = 10,136

So if my math is right, you'd pay a total of $15,936 (in NJ) on the 40k. In NYC, it'd be $17,395.20. (in NYC).

So net annual pay in NJ would be $143,751.10. In NYC, it'd be about $138,388.11 because you'd pay an extra 7448.60 in NYC income tax, but you'd be able to deduct that off your federal income tax.

Couple caveats:
  • Like before, this math is before things like insurance, 401k contributions, paying back salary advances, etc. Your actual expendable income will be lower.
  • I checked and 40,000 won't bump you up into any higher tax brackets. But for those with spouses making over $53,050/yr, your income will hit the 33% federal tax bracket for all income above that marker.
  • I did the math incrementally (i.e. I took the baseline results from the first post and just added the spouse's income on top). Not sure if that would give different results than plugging 210,000 into the equations, but if you really care you can double check the math (the equations are all in the second post).
Last edited by WhirledWorld on Sun Oct 27, 2013 1:12 pm, edited 2 times in total.

WhirledWorld
Posts: 331
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Re: NYC Tax breakdown

Postby WhirledWorld » Sun Oct 27, 2013 12:32 am

BONUS POST: Stub year taxes.

Assume you work October 1-December 31, netting 25% of your annual income plus a pro-rated bonus: Net annual income = $42,500.

Assuming you're single:

Federal = 4477.50

NY State Income = 2514.25

Social Security = 2635

Medicare = 616.25

Net taxes = $10,243

Net Income = $32,257

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anon919
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Re: NYC Tax breakdown

Postby anon919 » Sun Oct 27, 2013 11:34 am

Nice. Thanks for this.

WhirledWorld
Posts: 331
Joined: Wed Sep 22, 2010 11:04 am

Re: NYC Tax breakdown

Postby WhirledWorld » Sun Oct 27, 2013 1:00 pm

WhirledWorld wrote:BONUS POST: Stub year taxes.

Assume you work October 1-December 31, netting 25% of your annual income plus a pro-rated bonus: Net annual income = $42,500.

Assuming you're single:

Federal = 4477.50

NY State Income = 2514.25

Social Security = 2635

Medicare = 616.25

Net taxes = $10,243

Net Income = $32,257


Actually I forgot to add the lifetime learning credit, which reduces your federal taxes by $2,000 (assuming you spent at least $10,000 on tuition/books etc.)

So during your stub year, with the above assumptions, you actually take home about $34,257.

shock259
Posts: 1737
Joined: Tue Jan 19, 2010 2:30 am

Re: NYC Tax breakdown

Postby shock259 » Sun Oct 27, 2013 8:45 pm

Great breakdown. This is a bit higher than I remember seeing on other calculators (like paycheckcity). Let's hope your info is right. Thanks!




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