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New York City and New York State income taxes

New York City and New York State income taxes

Old Dec 9th 2014, 1:07 am
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Default New York City and New York State income taxes

Hi all! I am yet another Aussie baffled by the tax system in the US!

I have just moved here and today was my first day. I was given the Employee's Withholding Allowance Certificate IT-2104 form by HR but then told that they are not allowed to provide any advice or explanation on how to complete it!!

So any advice on my situation would be greatly appreciated!!

I am earning $105,000 per year, living and working in New York. I am married and my husband does not yet work. However once his Employment Authorization Document comes through in March, he will be working (Hoping to earn around $50-$60k). We don't have any kids. I don't want to have a tax bill at the end of the year but also don't want to pay over the odds in tax. I want to try to find the balance so that I pretty much pay the right amount or a little bit over.

I don't believe I am eligible for any allowances.

A colleague advised that I should withhold some additional pay for both New York State and New York City. How much should I withhold additionally to avoid a tax bill. I tried to use the charts provided at the back of the IT-2104 form and believe it should be $20 a week for the New York State.

Can anyone help me out!?
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Old Dec 9th 2014, 12:23 pm
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Default Re: New York City and New York State income taxes

I have moved your post into a thread of its own.
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Old Dec 9th 2014, 2:37 pm
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Default Re: New York City and New York State income taxes

The IT-2014 is the NY withholding form, it looks like it does both state and NYC. You should also be given a federal W4 withholding form to file. Fill them out claiming the allowances you work out. When you do your taxes you will see if you need to withhold a bit more. Don't worry about how much you might owe or be refunded, it will take a year or two to get things settled as you figure out your deductions and retirement savings.
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Old Dec 9th 2014, 4:18 pm
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Default Re: New York City and New York State income taxes

Welcome!

The good news is the tax year ends in December so you'll be getting money back after you file your taxes next year! $20 bi-weekly sounds about right for NYC.

I screwed up the federal (W4) withholding on my first full year in the US and had large tax bill so recommend you err on the side of caution for withholding and then fine tune as the years go by (depending on charitable donations etc!).
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Old Dec 10th 2014, 3:57 am
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Default Re: New York City and New York State income taxes

Even though I was married I claimed 0 on the W4 and withheld an additional $40 a month for NYS alone and an additional $20 a month for the city of Yonkers and usually just broke even thought I always got a refund from the federal. Also note that your contribution to a 401K will lower your taxable income before withholding kicks in.
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Old Dec 12th 2014, 1:13 am
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Default Re: New York City and New York State income taxes

Thanks everyone! So helpful! I worked out 0 allowances and will withhold a little extra just to cover my bases!

Can anyone give me advice on the federal taxes? I think I worked out 5 allowances. Husband and I will file jointly and this is how I got to 5:
- 1 each for not being a dependent = 2
- 1 as we are married and only I work =1
- 1 each for our spouses = 2.
Total = 5

When he is able to work (March) I will submit a new w-4 this to remove one of the allowances and also start withholding money as per the worksheet for our joint income. He won't claim any allowances (I read that it is better for the higher income person should claim them).

Is that about right?
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Old Dec 12th 2014, 1:45 am
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Default Re: New York City and New York State income taxes

My experience has been that the number of allowances calculated from the worksheet on the W4 tends to be a little on the high side so if you want to play it safe you might consider entering a lower number (in your case perhaps 3) on the form.
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Old Dec 12th 2014, 1:07 pm
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Default Re: New York City and New York State income taxes

Originally Posted by md95065 View Post
My experience has been that the number of allowances calculated from the worksheet on the W4 tends to be a little on the high side so if you want to play it safe you might consider entering a lower number (in your case perhaps 3) on the form.
Yep the OP should enter 3 allowances on the W4, I can't help with the NY allowances.
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