My annual bonus will be paid out in a few weeks, and I’m trying to figure out how to allocate it.
I currently work remote from a state with a relatively lower income tax rate (and no local income tax), but will be moving to NYC later this year (where the state income tax rate is higher + there’s of course the city income tax).
With that in mind, does it make sense for me, from a tax perspective, to max my 401k now with this bonus (while I pay lower income taxes), wait to contribute to my 401k on a paycheck-to-paycheck basis when I live in NYC (therefore lower my ETR per check when living in the city), or does it not matter and will be a wash come tax filing next year? I’d prefer to max it now with the bonus in order to increase monthly CF but wouldn’t want to do that if I end up having to pay more in taxes.
I should note that my firm provides its matching contribution as a lump sum at the end of the year, so that’s not a factor.
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