How to Calculate New York State Income Tax
The state of New York has a seven-tiered taxation system, which applies higher tax rates to individuals posting higher earnings. To calculate what you owe in New York state income tax, you'll need to figure out which tax bracket you belong in once you total up your taxable income for the year.
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Things You'll Need
- Calculator
- Tax preparation professional (recommended)
- W-2 report or equivalent
Instructions
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Learn the New York State Tax Brackets
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1
Pay a 4-percent tax rate to the state of New York if your taxable income is approximately $8,000 or less.
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2
Use a 4.5-percent rate to calculate what you owe in taxes if you earned about $8,000 to $11,000.
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3
Earn between approximately $11,000 and $13,000 in taxable income to qualify for the 5.25-percent tax bracket.
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4
Calculate your taxes using a 5.9-percent tax rate if your taxable earnings fall in the $13,000 to $20,000 range.
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5
Pay 6.85 percent in state income tax on earnings between approximately $20,000 and $100,000. The majority of adults fall in this tax bracket.
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6
Expect to pay 7.375 percent in state income tax if your taxable income falls between approximately $100,000 and $500,000.
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7
Get ready to pay 7.7 percent if you earn in excess of $500,000.
Calculate Your New York State Income Taxes
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8
Use your W-2 earnings statement to total up the income you've earned through your job. If you're self-employed, an independent contractor or a business owner, you will be responsible for totaling--and claiming--your own income.
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9
Add income from other sources that you may have received throughout the year. This will include any cash profits realized on investments, inheritances, prize winnings and money you get from any other source that is not a loan.
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10
Subtract all the tax deductions for which you qualify. If you're not sure about all the deductions you're legally allowed to claim, work with a personal tax advisor.
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11
Apply the tax rate of the income bracket you fall into to calculate what you owe. For instance, you would fall in the 6.85-percent bracket if you made $44,000. Thus, you would owe the state of New York $3,014 in income tax.
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Tips & Warnings
Failure to accurately report your income and pay taxes on your earnings can result in an audit by the IRS, fines and a prison sentence.
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Comments
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bondtrails
Jun 23, 2008
The instructions for calculating your taxes in step 4 is incorrect. You do NOT apply the bracket percentage to the amount you made after deductions. What you have to do is apply the taxes in parts: 1. Apply 4% to the first $8,000 of your income 2. Apply 4.5% to the next $3,000 (which brings you to the $11,000 mark) 3. Apply 5.25% to the next $2,000 (which brings up up to the $13,000 mark) 4. Apply 5.9% to the next $7,000 (which brings you up to the $20,000 mark) 5. Finally, apply 6.85% to the next $24,000 (which brings you to the $44,000 total income mark). Your final NYS tax liability is $2617 (not $3,014 as claimed in step 4). Hope this helps!
