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New York State Tax Guide- State Tax Rates and Information

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New York State Tax Guide- State Tax Rates and Information

 

Tax Relief Solutions for New York State

The State of New York is among one of the highest tax rates in the Nation.  The only states currently higher are California, Oregon, Hawaii and Minnesota.

As with many Americans, attempting to figure out your taxes is tiresome with all the brackets and cumbersome if you’re not sure what to look for.  So, if you are moving or thinking of relocating to the State of New York, hopefully this will help shed a little light on taxes.  As with any tax, it’s always a smart choice to reach out to a professional tax preparer as they are familiar with rates, what to expect, etc.

Finally, New York imposes all three major state taxes: income tax, sales tax, and property taxes.

New York State Income Tax

New York State income tax rates in 2020 range from 4% to 8.82% depending on your income and filing status. Now, if you choose to reside in New York City, you will also need to pay a local tax as the City imposes its own tax on top of the State tax.

Those rates range from 3.078% to 3.876%. NY State Tax Tables is a good place to start. These tables provide a tax calculator and other questions you should answer to assist in finding out which bracket you fall under.  Using this resource will assist you in knowing if you will receive a refund or expect to pay some tax.  If you do expect to owe, this site will also update you on what penalties you could expect for late payments.

The State of New York shows tax table according to your filing status and income level.  So, if you are Single and earn $8,500 or less, you can expect to pay 4%.  If you are Married Filing Joint and earn $17,150 or less, you can also expect to pay 4%.  On the other side of this table, if you are Single and earn over $1,077,550 you can expect the top tax bracket of 8.82%.  If you are Married Filing Joint and earn $2,155,350 you can also expect to pay 8.82%.  The State does provide a quick calculator where you enter in your income, filing status and dependents and it will provide a general amount you could expect to owe in tax.  It’s not perfect, but a lot better than not knowing and then paying penalties and interest on top of what you owe.

New York State Sales Tax

The State of New York has a Sales and Use Tax Rate.  Sales Tax applies to retail sales of tangible (real) personal property and services.  Use Tax applies if you buy these tangible items and services outside the State but use it within the State of New York.

There are two sales tax rates to be aware of; one for New York City and one for New York State. If you are shopping and purchase clothing items or shoes and spend under $110, there is no sales tax.  However, if you spend more than $110, New York City is 4.5% Sales Tax and 4% in New York State Sales Tax.

If you are purchasing personal property like furniture or electronics, utility services like gas, electricity, telephone, using a cleaning service or buying an admission to a place of amusement like a park or theater, the City Sales Tax rate is 4.5%, the State Sales and Use tax is 4%, the Metropolitan Commuter Transportation District surcharge of 0.375% = a Sales and Use Tax of 8.875%.

Next are services, such as barbers, nail salons, tanning parlors and fitness clubs, there is a City Sales Tax rate of 4.5% on the service, but there is no State Sales Tax.  However, if your purchase any products at these establishments, an $8.875% combined City and State tax will be charged.

If you choose to reside in Manhattan, the Sales and Use taxes are extensive.  For example, if you own a vehicle registered in Manhattan, you could pay a tax rate of 18.375% for parking, garaging, or storing your vehicle.  Some may qualify for a Manhattan Resident Parking Tax exemption which would reduce this rate by 8%, therefore you are only paying $10.375%. Before moving into Manhattan, you may want to check to be sure you are eligible for this reduced rate.

New York State property tax

Property taxes are confusing no matter which state you reside.  Oddly enough, the property tax in New York City is lower than the State at just .090%, while the State average is 1.68%.  The best place to start is here at the State of NY Online Resource.  This guide will help you navigate the rates, assessed values by county and exemptions.

The tax rates, as with most states, are applied to the assessed value of your home.  The rates you will find on your real estate tax bill, include county, city, school district and possibly special rates to fund projects like parks.  The rates are recalculated each year, and my increase or decrease depending on the rate of inflation, but it won’t necessarily change the amount that much. For example, if you reside in New York County, the average home value is $915,300 with a tax rate of 0.90%, so you could expect to pay $8,237 in taxes. Even though this County has the lower rate, the homes are more expensive per square foot thereby you end up paying more. Another example is if you live in Westchester County, the average home value is $513,300, with a rate of 1.95%, so you could expect to pay $10,000 in taxes.

 

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