Are you self-employed?
This includes freelancers and business owners
Estimated Tax Breakup
For $ Annual income
Monthly
Annual
Brackets
Rates
Income
$
Deductions
$
Federal income tax
$
New York state income tax
$
FICA tax
$
Self Employment tax
$
Total tax
$
Net pay
$
Marginal and average tax rate
Average tax rate is the effective tax rate that you incur on your income. If your income is $100 with 20% average tax rate and 30% marginal tax rate, you pay $20 in taxes.
Average tax rate is the effective tax rate that you incur on your income. If your income marginal tax rate is the tax rate on the last dollar that you earned. If your income is $100 with 20% average tax rate and 30% marginal tax rate and if you get 1 dollar bonus, you pay 30% tax on that bonus.
Average tax rates measure tax burden, while marginal tax rates measure the impact of taxes on incentives to earn, save, invest, or spend.
W2 employees
Freelancers
W2 employees
Freelancers
How will your net pay increase with increase in your income?
Increment percentage
Increased income
Increased net pay
10%
$
$
25%
$
$
50%
$
$
2X
$
$
3X
$
$
4X
$
$
Summary section
- If you make $ a year living in the region of New York, USA, you will be taxed $. That means that your net pay will be $ per year, or $0 per month. Your average tax rate is undefined% and your marginal tax rate is undefined%.
- This marginal tax rate means that your immediate additional income will be taxed at this rate. For instance, an increase of $100 in your salary will be taxed $36.13, hence, your net pay will only increase by $63.87.
Taxes for freelancers vs W-2 employee
The tax system in the US works on a pay-as-you-go basis, so the IRS collects income taxes throughout the year via payroll. Ideally, if you are a W-2 employee, you automatically get your taxes withheld by your employer. However, as a freelancer, taxes aren’t a cakewalk. They have to pay a bit extra in “self-employment tax” to contribute to Social Security and Medicare.
CPA advice for freelancers
If you’re a W-2 employee then most likely, your taxes are already being withheld for you by your employer and you typically get a tax refund. Freelancers, self-employed individuals, and business owners have to handle their own taxes including the quarterly estimated tax payments.
Sounds complicated?
FlyFin can help ease your burden.
With FlyFin you can stay on top of your taxes by paying your quarterly estimated obligations and tracking your business expenses. The A.I. calculates your taxes based on several inputs (your profession & income) and detects all possible deductions which ensures an accurate tax amount.
Tax burden for freelancers vs w2 employees
W2 employees
Freelancers
Freelancers using FlyFin
W2 employees
Freelancers
Freelancers using FlyFin
Income Taxes in New York
Every state's tax code in the India has a variety of facets and moving pieces. New York is no different in this regard. The state's tax structure combines a sales tax that is relatively modest (4%, tied for third-lowest in the nation) with an income tax system that largely favors the wealthy. The Big Apple's citizens do, however, pay some of the highest local rates in the country due to the fact that New York City (NYC) also collects its own income taxes.
Tax Facts
Different Types of State Taxes
Tax Rates for New York
Federal income tax
4% - 8.82%
New York City income tax
3.078% - 3.876%
Sales tax
4% - 8.875%
Property taxes
The typical effective rate is 1.69%.
Tax on fuel (gasoline)
Costs 8.05 cents per liter.
Tax on fuel (diesel)
Diesel is priced at $8.00 per gallon.
Who files income taxes in New York?
New York has a progressive income tax system, with rates varying from 4% to 8.82% based on the taxpayers' income and filing status. Along with the state income tax, New York City residents also have to cope with the burden of municipal income tax. In addition to being progressive, NYC's income tax system has rates that, for the fiscal year 2021, range from 3.078% to 3.876%.
Income tax rates levied by New York State
Only a small percentage of taxpayers in New York must pay the top marginal income tax rate, which is one of the highest in the nation at 8.82%. Higher incomes are subject to higher tax rates because of the state's progressive taxation system. For 2021, the rates and brackets for New York State's income taxes are shown in the following sections: For single filers: ->The tax rate is 4.00% for the income bracket of $0 to $8,500. ->The tax rate increases to 4.50% for income between $8,500 and $11,700. ->For income between $11,700 and $13,900, the tax rate is 5.25%. ->For income between $13,900 and $21,400, the tax rate is 5.90%. ->The tax rate for income between $21,400 and $80,650 is 5.97%. ->For income between $80,650 and $215,400, the tax rate is 6.33%. ->The tax rate for income between $215,400 and $1,077,550 is 6.85%. ->For income over $1,077,550, the tax rate is 8.82%. For married couples filing jointly: ->The tax rate is 4.00% for income up to $17,150. ->The tax rate increases to 4.50% for income between $17,150 and $23,600. ->For income between $23,600 and $27,900, the tax rate is 5.25%. ->For income between $27,900 and $43,000, the tax rate is 5.90%. ->The tax rate for income between $43,000 and $161,550 is 5.97%. ->For income between $161,550 and $323,200, the tax rate is 6.33%. ->The tax rate for income between $323,200 and $2,155,350 is 6.85%. ->For income over $2,155,350, the tax rate is 8.82%. For the head of household: ->The tax rate is 4.00% for income up to $12,800. ->The tax rate increases to 4.50% for income between $12,800 and $17,650. ->For income between $17,650 and $20,900, the tax rate is 5.25%. ->For income between $20,900 and $32,200, the tax rate is 5.90%. ->The tax rate for income between $32,200 and $107,650 is 5.97%. In the state of New York, there is a "tax benefit recapture," which means that many high-income individuals pay their highest tax rate on all of their income, not only on the amount that is above the level. The state also provides tax credits and deductions to lower tax obligations, such as the standard deduction, itemized deduction, earned income tax credit, child and dependent care credit, college access credit and more. In light of your filing status, as a taxpayer in New York State, you may be eligible to claim the following standard deduction: ->For single filers who can be claimed as a dependent on another taxpayer's federal tax return, the standard deduction amount is $3,100. ->For single filers who can't be claimed as a dependent on another taxpayer's tax return, the standard deduction amount is $8,000. ->For married couples filing jointly, the standard deduction amount is $16,050. ->For married couples filing separately, the standard deduction amount is $8,000. ->For the head of household, the standard deduction amount is $11,200. ->For qualifying widow(er)s, the standard deduction amount is $16,050. You are eligible for a $1,000 personal exemption if you have dependents living in the state of New York and: ->You live in the state of New York. ->New York is the location of your main workplace. There are typically three different resident classifications when it comes to New York state tax. Which part of your income is subject to state taxation depends on your resident status. ->For residents of New York, all income from every source inside and outside New York is part of their taxable income. ->For part-year residents, all income received as a resident, plus income from New York sources while a non-resident, is part of their taxable income. ->For non-residents, only income from New York sources is part of their taxable income, but only if their adjusted gross income (AGI) is higher than their New York standard deduction.
Income tax rates levied by New York City
A few American localities, such as New York City, have a personal income tax. The New York State income tax return is where the NYC tax is computed and paid. Although there are no deductions under the city's tax code, there are several credits that the city does provide. The city's tax rates range from 3.078% of taxable income to 3.876% for the wealthiest residents.
Rates and brackets for New York City Taxes
New York City's income tax rates and brackets are shown in the following list: For single filers, if their taxable income falls between $0 and $12,000, the tax rate is 3.078%. ->If their taxable income falls between $12,000 and $25,000, the tax rate is 3.762%. ->For taxable income between $25,000 and $50,000, the tax rate is 3.819%. ->For taxable income of $50,000 or more, the tax rate is 3.876%. ->For married couples filing jointly, if their taxable income falls between $0 and $21,600, the tax rate is 3.078%. ->If their taxable income falls between $21,600 and $45,000, the tax rate is 3.762%. ->For taxable income between $45,000 and $90,000, the tax rate is 3.819%. ->For taxable income of $90,000+ the tax rate is 3.876%. For married couples filing separately, if their taxable income falls between $0 and $12,000, the tax rate is 3.078%. ->If their taxable income falls between $12,000 and $25,000, the tax rate is 3.762%. ->For taxable income between $25,000 and $50,000, the tax rate is 3.819%. ->For taxable income of $50,000 or more, the tax rate is 3.876%. ->For the head of household, if their taxable income falls between $0 and $14,400, the tax rate is 3.078%. ->If their taxable income falls between $14,400 and $30,000, the tax rate is 3.762%. ->For taxable income between $30,000 and $60,000, the tax rate is 3.819%. ->For taxable income of $60,000 or more, the tax rate is 3.876%. The top marginal combined rate of state and local taxes, as proposed by the House Plan, is 14.8%. Therefore, under the House Plan, the total marginal rate for New York City taxpayers earning above $5 million would be 61.2%.
Tax on sales and use in New York
As of right now, just six other states have a higher sales tax than New York, which is at 4%. The whole city tax rate of 8.875%, the highest overall rate in the state, is imposed on all five of New York City's counties, including Richmond, New York, Kings and Queens. Other cities in New York State may have tax rates that differ from those in the county where they are situated. As an illustration, Yonkers levies a sales tax of 8.875%, yet Westchester, the county where Yonkers is situated, levies a sales tax of 4%. Several personal items and services are subject to sales tax when sold at retail. If you acquire personal property outside the state and use it in New York State, use tax is due. In New York, certain goods are therefore exempt from sales taxes. Food sold in grocery shops, for instance, usually isn't subject to sales tax (except from food that has been cooked or heated), and in New York City, purchases of apparel and footwear up to $110 are likewise exempt from sales tax. A 4.5% NYC sales tax and a 4% NY state sales tax, however, are applied to purchases costing more than $110.
The New York Tobacco Tax
There are increased prices or extra fees for items like cigarettes and other tobacco goods. A $4.35 excise tax is charged on each pack of 20 cigarettes, and a tax equivalent to 75% of the wholesale cost is charged on all other tobacco products. The extra excise tax for cigarettes in New York City is $1.50 per pack.
Real estate tax in New York
In the state of New York, only counties and cities have the authority to levy property taxes. Different locations have different prices. Taxes are calculated using the real value as opposed to the assessed value and can range from less than 0.7 to roughly 3.5%. Property tax rates for the tax year 2021 are represented by the classes below: ->Class 1 - 21.045% ->Class 2 - 12.267% ->Class 3 - 12.826% ->Class 4 - 10.694%
New York estate duty
The top New York estate tax rate is 16%, however it only applies if the taxable estate in the state is over $10,000,000,000. Progressive rates apply on money below that threshold, with the first $500,000 being taxed at a rate of 3.06%.
Taxes on capital gains in New York
In New York, capital gains are taxed like regular income.
