[ladhanivishal]

Hi All,

I will be shifting to NYC on L1 visa along with my wife next week. My salary is 67K. I wanted to know
1. How much tax I will be paying on this (considering I will be staying in NJ, is that matters?)?
2. What things can help me benefit i.e minimise the tax liability? What kind of expenses I can claim for exemption?

Thanks in-advance for the answer.

Regards,
Vishal

[AtlantaTaxExpert]

Vishal:

If you LIVE in NJ and work in NYC, you will PAY taxes to NY state (but NOT NY City). Arrange to have NY state income taxes withheld from your salary. At the end of the year, you will have to file a NY state income tax return (Form IT-203 as a non-resident who is earning income within NY state borders). The NY state tax rate for your income level is about 6.85%.

You will also have to file a New Jersey tax return, but NJ will give you a credit for the taxes paid to NY state. Since NY state income tax rates are generally higher than NJ, that credit should completely offset any NJ state tax liability, resulting in ZERO NJ state tax liability.

For this reason, it makes no sense to have NJ state taxes withheld just to have them refunded in 2010. Now, that circumstance changes if your wife works in NJ. Let me know if that is the case.

[ladhanivishal]

Vishal:

If you LIVE in NJ and work in NYC, you will PAY taxes to NY state (but NOT NY City). Arrange to have NY state income taxes withheld from your salary. At the end of the year, you will have to file a NY state income tax return (Form IT-203 as a non-resident who is earning income within NY state borders). The NY state tax rate for your income level is about 6.85%.

You will also have to file a New Jersey tax return, but NJ will give you a credit for the taxes paid to NY state. Since NY state income tax rates are generally higher than NJ, that credit should completely offset any NJ state tax liability, resulting in ZERO NJ state tax liability.

For this reason, it makes no sense to have NJ state taxes withheld just to have them refunded in 2010. Now, that circumstance changes if your wife works in NJ. Let me know if that is the case.

Thanks for the answer.. no my wife won't be working
I want to know what will be the federal tax? And how much tax exemption can I get?
I am trying to figure out my yearly in-hand salary here considering I will be staying in NJ and paying NY state tax

[AtlantaTaxExpert]

Federal tax is progressive and based on your income level. At 67K, your marginal tax rate (the tax charged on the LAST dollar you earn in 2009) will be 15%.

You can claim TWO personal exemptions (one for you, one for your wife) plus about $11K in standard deductions for Married Filing Jointly, so the first $18,300 of your income I tax-exempt.

[MukatA]

You may be able to claim moving expenses. Your U.S. Tax Return: Moving Expenses