What Should I Know About The New York City Tax Rates?

If you lived in New York City or just worked there, you will have to file New York City income taxes.

New York, New York; There is no place like it. New York City attracts millions of people from literally everywhere. New York has remained for years as one of the ten most expensive cities in the world to live in. Part of the reason has to do with the fact that New York City is one of fourteen US cities which has an individual income tax rate in addition to state taxes. Not to mention, New York City also has other additional sales taxes.

 If you lived in New York City or worked there, there are some tax forms and reports to fill out when filing your late taxes.  Not to mention, knowing the NYC tax rates is important when filing your taxes.  

NYC Income Tax

New York City charges a personal income tax to residents of the city. The additional income tax rates range from 2.907% to 3.20%. This tax is collected by the New York State Department of Taxation and Finance, meaning it is part of the New York State tax return form. This tax also applies to those who work in New York City even if they live outside the city and is also probably taken out from the NYC paycheck. While filing taxes these individuals who work in New York City but live elsewhere, must file Form 1127  and pay the necessary city taxes (in addition to state taxes).

Other Additional New York City Taxes

Sales Tax: New York City sales tax rate is generally 4.5%, while the New York State sales tax is 4%, in most cases these taxes go along with a surcharge of 0.375%, meaning total sales tax in New York City adds up to 8.875%.  However, clothing and footwear under $110 are exempt from New York City and NY state sales tax.  For services, such as haircuts, manicures, pedicures, massages, tanning, tattooing, etc., there is only a New York City sales tax of 4.5%

Parking/Garaging Tax: The most expensive tax in New York City is for parking, garaging, and storing motor vehicles. In these cases, the city charges a 10.375% tax along with an extra 8% surtax for parking, garaging and storing motor vehicles in Manhattan specifically.

If you own a Manhattan registered motor vehicles, you will most likely be eligible for a NYC parking tax exemption titled Manhattan Resident Parking Tax exemption, meaning you would pay only the 10.375% tax.

Tobacco Tax: On top of the sales tax, there is a tax of 75 cents on every ten cigarette or a $1.50 on a pack of cigarettes (20 cigarettes). If the package has over 20 cigarettes, the rate after twenty is 38 cents for every five cigarettes.  If you smoke, these high taxes might be enough for you to drop the addiction.

Property Taxes: Renters in New York City most likely have to pay high property taxes. Depending on what year you are filing taxes for, the property tax rate varies. These rates are listed on the NYC Finance website.

For a complete list of New York City taxes, the New York City Finance website provides a complete list.

Save money on New York City taxes:

If you buy a lot, writing down states sales tax and saving receipts can possibly be a state sales tax deduction on your federal return.  This is in the case of what you buy exceeds state withholding on your income.

When dealing with New York City taxes and tax return, you might be confused on what to do. The most important thing to remember is the additional income tax if you live or work in New York City and when you file current year or past year  returns, you will do so on your New York State tax return.

The bottom line is that the Big Apple is one of fourteen US cities to levy separate individual income taxes in addition to state taxes. There’s no other place like New York, New York. There’s also no other city with taxes like it either!

Photo via Rex Boggs on Flickr

 

This entry was posted on Wednesday, November 20th, 2013 at 7:36 pm and is filed under Tax Tips and Tricks. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.