Effective tax rate?

jackson1's picture
Rank: Senior Monkey | 99

Just wondering what you guys all pay total in taxes as a percentage of your income, and what your all in income is as well (IB analysts). Especially interested in Houston and Chicago, as I have offers (or am anticipating offers) in those cities as well as NYC. Money isn't a deciding factor but it would be nice to have some cash in the bank after a couple years. No state income tax in TX would be nice...

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Aug 29, 2014
jackson1:

Just wondering what you guys all pay total in taxes as a percentage of your income (salary + bonus), and what your all in income is as well (IB analysts). Especially interested in Houston and Chicago, as I have offers (or am anticipating offers) in those cities as well as NYC. Money isn't a deciding factor but it would be nice to have some cash in the bank after a couple years. No state income tax in TX would be nice...

Aug 29, 2014

I'd say 35% is about right... you're looking at about 25% in federal taxes. Payroll taxes are around 6%, and I don't know what state taxes are in NY.

Aug 29, 2014

70k base, paid every 2 weeks, get around 1870 ish.

Aug 29, 2014

1870ish, is that before you take out 401k, insurance etc? If you do that, wont it skew the number?

Aug 29, 2014

1) Although your salary is $70,000, the first year you only work HALF a year, so your effective federal tax rate will be a lot lower than if you had made $70,000 during that calendar year. You are still in the 25% tax bracket, true. However, If you didn't work while in school, get a $10,000 signing bonus and make $35,000 (half of your yearly $70,000 salary), your EFFECTIVE FEDERAL TAX RATE IS ABOUT 10.5% (http://www.dinkytown.net/java/TaxMargin.html)
2) NYC taxes should be around 3% (http://www.nyc.gov/html/dof/html/pdf/interest_rate...)
3) Taxes during your second "caledar" year (that is, the January during your first year or the second half of your first year) will be a lot higher. If you make $70,000 (assuming no bonus), you'll be in the 25% tax bracket and your effective federal tax rate will be about 15%. But if you take home a 50k bonus, you'll be in the 28% tax bracket and your effective federal tax rate will be about 20.5%.

Aug 29, 2014
Aug 29, 2014

my friend's in nyc at a bb and his experience is similar to 1styearbanker's.

Aug 29, 2014

You also have to consider that the first year you'll get a few thousand dollars of taxes back (reason: you work half a year, make 35+10k, but your taxes are withheld based on your 70k salary). After the first year you won't probably get anything back.

Aug 29, 2014
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