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I'm trying to figure out if I should accept a job offer in NYC.

Here's tax bracket information for NYC.

Here's federal tax information.

I'm trying to figure out how much of what I'm being paid I'll be able to take home to cover all my expenses.

My question is, if I make $10, I know that it'll be taxed at 4% by NYC and 10% by the federal government. My question is if I'm left with:

$10*(1-0.14)
or
$10(1-0.04)(1-0.10)

In other words, is federal income tax calculated after city tax, is it vise verasa, or do they both happen at the same time?

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2 Answers 2

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It's simultaneous for withholding (but see below).

10% of $10 == $1 goes towards federal taxes
 4% of $10 == $0.40 goes toward city taxes
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86% of $10 == $8.60 goes to your wallet

(I'm ignoring other things like state tax, insurance, etc that might further decrease your net pay.)

However, if you itemize your deductions for your federal tax return, you can deduct state and local taxes under some circumstances, which means that you can deduct that $0.40 per $10 from your taxable federal income. That's effectively the same as if your city tax were taken first, then the remaining $9.60 being subject to the 10% federal tax.

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I'm trying to figure out how much of what I'm being paid I'll be able to take home to cover all my expenses.

One can use tax calculators such as SmartAsset's income tax calculator:

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(which confirms that state and city taxes get pulled out concurrently, e.g. since 100,000 USD * 5.38% ~= 5378 USD)

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