America has a city, state and federal tax system. Tax is deducted from employees and depends on the job and rate of pay. The IRS.gov is responsible for monitoring taxes and performs audits to assure that tax returns are being appropriately paid.
Tax Phrases for New York:
- Gross Salary is the amount your employer pays you
- W-2 wages are the wages that appear on the employee's W-2 issued by his employer each year in January. A copy of the W-2 is sent to the Internal Revenue Service (IRS). It is the Gross Salary less any contributions to pre-tax plans. The W-2 form also shows the amount withheld by the employer for federal income tax. W-2 Wages = Gross Salary less (contributions to employer retirement plan) less (contributions to employer health plan) less (contributions to some other employer plans)
- Total Income is the sum of all taxable income, including the W-2 wages. Almost all income is taxable.
- Adjusted Gross Income (AGI) is Total Income less some specific allowed deductions. Such as; alimony paid (income to the recipient), permitted moving expenses, self-employed retirement program, student loan interest, etc.
- Itemized Deductions are other specific deductions such as; mortgage interest on a home, state income taxes or sales taxes, local property taxes, charitable contributions, state income tax withheld, etc.
- Standard Deduction is a sort of minimum Itemized Deduction. If you add up all your itemized Deductions and it is less than the Standard Deduction you take the Standard Deduction.
- Personal Exemption is a tax exemption in which the taxpayer can deduct an amount from their gross income for each dependent they can claim.
Filing Taxes in the USA
Some of this tax may be rebated, or more tax may be required, after a mandatory annual accounting done by the citizens with a due date of April 15th.
If you do not have stocks, pension plans or other investments, filing your own tax return is fairly simple and it is cheapest to complete by yourself online. Forms can be found on the IRS website, uch as Form 1040 which is used by many U.S. taxpayers to file an annual income tax return.
If your return is more complicated, large firms like Hrblock and Turbotax can help citizens fill out forms online or in-person to determine how much taxes are owed or to be refunded. You may also consider hiring an accountant or tax specialist to go through the paperwork.
Ward's Accounting Service, Inc.
681 E. 181st Street Suite A
Bronx, New York 10457
Phone: (917) 664-0508
www.wardsaccountingsvc.com
Margo's Bookkeeping Service
1577 West 4th
Brooklyn, New York 11204
Phone: (718) 627-2387
Fax: (718) 228-7121
www.margosbookkeeping.com
HARA Accounting Office
501 5th Avenue, Suite 2009
New York, New York 10017Phone: (612) 327-3259
Fax: (866 334-0321
www.haracpa.com
William G. Green CPA
250 South End Ave, #7A
New York, New York 10280
Phone: (917) 673-9255
www.wggpc.info/
Individual Taxes
Anyone living in the United States is taxed, including foreigners who are under a permanent resident status, have a green card, or if they live in the United States on average at least 122 days over 3 years.
Most countries have formed a partnership with the United States to ensure that their citizens are not doubly taxed but check with your own country to confirm that your taxes are paid appropriately.
For 2019, the Federal tax brackets, based on filing status, are:
| 2019 Federal Tax Bracket Thresholds Taxable Income by Filling Status | ||||
| Marginal tax rate | Single | Married filling jointly and surviving spouse | Head of household | Married filling separately |
| 10% | $0-$9,700 | $0-$19,400 | $0-$13,850 | $0-$9,700 |
| 10% | $9,701-$39,475 | $19,401-$78,950 | $13,851-$52,850 | $9,701-$39,475 |
| 10% | $39,476-$84,200 | $78,951-$168,400 | $52,851-$84,200 | $39,476-$84,200 |
| 10% | $84,201-$160,725 | $168,401-$321,450 | $84,201-$160,700 | $84,201-$160,7025 |
| 10% | $160,726-$204,100 | $321,451-$408,200 | $160,701-$204,100 | $160,726-$204,100 |
| 10% | $204,101-$510,300 | $408,201-$612,350 | $204,101-$510,300 | $204,101-$306,175 |
| 10% | $510,301 and more | $612,351 and more | $510,301 and more | $306,176 and more |
This applies only to amounts above $9,700 (standard deduction of $5,350 plus the one personal exemption of $3,400) for an individual. For example, a single individual would actually pay 10% on the first $9,700 of income, 12% on the amount of income between $9,700 and $39,475, 22% on the amount of income between $39,475 and $84,200 and so on.
VAT in New York State
New York State does not have a federal value-added tax (VAT) on goods or services as in many European countries and Latin American. Instead, a sales and use tax is used in most US states.
- Sales Tax - applies to retail sales of certain tangible personal property and services.
- Use Tax - applies if you buy tangible personal property and services outside the state and use it within New York State.
| Goods and Services Subject to Tax; | Tax Rates |
| Clothing and Footwear | Clothing and footwear under $110 are exempt from New York City and NY State Sales Tax. Purchases above $110 are subject to a 4.5% NYC Sales Tax and a 4% NY State Sales Tax. |
| Most personal property (i.e. alcohol, furniture, electronics, etc) Gas, electricity, refrigeration, steam, telephone and telegraph services Occupancy of hotel and motel rooms Food and beverages sold by restaurants and caterers Admission charges to places of amusement Credit rating and credit reporting services | The City Sales Tax rate is 4.5%, NY State Sales Tax and Use Tax is 4% and the Metroploitan Commuter Transportation District surcharge of 0.375% for a total Sales and Use Tax of 8.875 percent. |
| Beauty, barbering, hair restoring, manicures, pedicures, electrolysis, massage, tanning, tattooing and other, similar services. Health and Fintess clubs, wight control salons, gymnasiums and similar establishments | The City Sales Tax rate is 4.5% on the service; there is no NY State Sales Tax. If products are purchased, an 8.875% combined City and State tax will be charged. |
| Parking, garaging or storing motor vehicles | The City charges a 10.375% tax and an additional 8% surtax on parking, garaging or storing motor vehicles in Manhattan. If you are a resident of Manhattan and own a motor vehicle registered in Manhattan, you may be eligible for a Manhattan Resident Parking Tax exemption from the 8% surtax. For those who qualify, the tax will be at a rate of 10.375% instead of 18.375% |
Source: New York State Sales and Use Tax. New York State – Department of Finance
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