Understanding taxes taken out of paychecks in New York

Understanding taxes taken out of paychecks in New York

On Behalf of | Oct 31, 2022 | Tax Planning

When you get your first job, your employer will withhold a certain amount from your paycheck and pay it to the federal government on your behalf. Then, in April, you will file a tax return allowing you to get some of that money back possibly. But if you did not have your employer withhold enough money, you would have to pay the difference. You can see the different types of payments made on your behalf when you look at your paycheck in New York.

Federal taxes

As you look at your paycheck stub, you will see money taken out for federal taxes. This amount is often abbreviated FTW for federal tax withholding. Everyone has a different withholding amount because it depends on the information you provided on a form on your first workday.

State taxes

You will also see an amount for state tax withholding. It is sometimes abbreviated STW or SWT. This amount depends on how much money you make. As of 2022, it varies between 4 and 10%, but you can check with your human resource department to find the exact amount.

Local taxes

Depending on where you live in New York, you may also have local taxes taken out of your check. For instance, New York City and Younkers collect about 3% of the money you earn to pay the city government.

Saving money on your taxes

When you file taxes in April, you can subtract some things from the total money you have paid into your tax fund off your paychecks. These deductions may allow you to get some money back. The government sets a standard deduction, but many people can get more than that amount by itemizing their deductions. Tax planning helps because you must act to receive most deductions before December 31.

Federal and state taxes taken from your New York paycheck pay your annual tax bill. Depending on where you live, you may also see local taxes withheld. You may get some of this money back when you file your taxes.