New York Income Tax Changes for 2009

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Real Estate Agent with Town Residential

Recently, New York State enacted new tax laws that include a significant increase in personal income tax for upper-income taxpayers.

Personal Income Tax Increase

Retroactive to January 1, 2009, two new personal income tax brackets are established on top of the current top tax rate of 6.85%. The rate increases to 7.85% for married couples filing joint with incomes over $300,000; for head of household filers with incomes above $250,000; and for single filers with income over $200,000.

The rate increases to 8.97% for all filers with incomes above $500,000.

Phase-out of Itemized Deductions

Retroactive to January 1, 2009, taxpayers with a New York adjusted gross income over $1 million may not claim any itemized deductions except for 50% of their charitable deductions. Previous law for taxpayers earning $525,000 or more allowed 50% of all NY eligible itemized deductions.

Supplemental Wage Withholding Rates

Effective May 1, 2009, for all supplemental wages, (bonuses, stock award vesting's, option exercises, etc.) - regardless of amount - the New York State withholding rate will increase to 11.03% from 7.35%. This applies to all supplemental payments, regardless of one's adjusted gross income. The New York City supplemental wage withholding rate remains unchanged (4.0%).

Quarterly Estimated Taxes

All New York taxpayers (resident and non-resident) must now be current on their tax liabilities based on the new rates. As a result, you may need to adjust your 2009 New York income tax withholdings and/or make estimated tax payments during 2009 to avoid any penalties. Note that if you are basing 2009 estimated tax payments on the 2008 "safe harbor amount", the 2008 tax must be recomputed using the new 2009 tax rates.

If you have any questions please contact your personal tax advisor

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Rainer
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Ed Macias
Real Estate Teammates - Miami, FL
Miami FL-REO Property Management Multifamily

Nice article. I work referrals. If you are interested let me know.

Jun 04, 2010 02:11 AM #1
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