Hi All -
Does anyone know what the new NYC tax rate will be on investment banking analyst bonuses coming up this summer? Been hearing that it will be significantly lower and you will be able to bring home a lot more.
Last year NYC analyst bonuses were taxed ~45% - 50%. Anyone have a ballpark for what they think it will be this summer? I'm sure there's a way for me to figure out through research... but pressed for time these days.
Thanks!
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Hi coldemailmaster, whoops, looks like nobody chimed in here.... maybe one of these discussions below is relevant:
If we're lucky, the following users may have something to say: @konk2001" DTownBanking BSchoolBanker
Hope that helps.
Bump
Sorry, what? What new NYC tax rate?
Theres a difference between withholding and taxation. People generally complain about the withholding aspect but they should be more concerned with the taxation aspect.
Taxes for most analysts will be lower and therefore I assume withholding will be lower too.
Don't confuse the % you take home on your bonus check and the actual effective tax rate on your bonus.
Bonuses aren't taxed at 45% - 50%, even if that's all you take home come payday. The IRS is stupid by design - it takes your bonus check and annualizes it as if that's your typical rate of pay, and then it withholds at the corresponding marginal tax bracket for that paycheck. For many IB analysts this will put bonus checks into the highest marginal bracket (for 2018 that's 37% for any $ over $500k annually).
When you file your tax return, the IRS compares what was withheld to your actual yearly earnings and refunds what you overpaid. The actual federal effective tax rate for someone with gross income of ~$150k should be around 18% this year (24% marginal bracket), vs around 21% in 2017 (28% marginal bracket) assuming nothing but the standard deduction.
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