A good accountant can be an individual’s or small business owner’s best friend. Running a business in New York City can be particularly difficult. New York is an exciting, interesting place to live and work, but the tax burden can be overwhelming.
New York City Income Tax
New York City has the dubious distinction of being one of the very few cities in the U.S. that has its own income tax, up to 3.648%. It is based upon the state’s taxable income. There are no specific deductions for the city tax, but there are tax credits that can offset the NYC income tax. New York City Tax Filing for those living in NYC or Yonkers is done at the same time as the NY state tax on April 15th.
New York State Income Tax
The state income tax rates start at 4% and go as high as 8.97%. Deductions are similar to those for U.S. income taxes, with the addition of deductions for New York’s 529 plans and for college tuition. Child care tax credits, New York earned income tax credits and college tuition tax credits apply. Pensions from the government are exempt.
New York City Property Taxes
Property taxes in New York City are some of the highest in the entire country. Tax revenues are used for services such as police and fire, education and road maintenance. In January, a tentative tax bill is sent out, with the final bill sent in May. The bills are based upon the estimated market value of the property. If the property owner disagrees, an appeal can be filed. There are exemptions available for certain individuals.
Sales taxes are another burden on individuals and businesses. New York State charges 4%, New York City collects an additional 4.5% and the Metropolitan Commuter Transportation District adds a surcharge of 0.375%. For those in NYC, the combined sales and use tax is 8.875%. The sales taxes are not paid on food and drugs, both prescription and over-the-counter. No tax is paid for footwear or clothing costing less than $110.
In New York, Robert A. Woloshen is a CPA, who believes that what you keep is much more important that what you earn. When it’s time for your New York City Tax Filing, talk to a professional at Rawcpa.com.
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