Effective tax rate?

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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Comments (10)

Aug 29, 2014 - 5:47pm

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 - 5:48pm

Salary tax rate (Originally Posted: 11/25/2009)

Anybody know what an NYC analyst gets taxed % wise? I looked at federal and state taxes but then I didn't factor in all the extra BS we get charged for (social security, medicare, etc.). I wanted to estimate on the high side and used a 35% rate. Am I way off?

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Best Response
Aug 29, 2014 - 5:52pm

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_rates/pitrates.pdf)

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 - 5:55pm

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 - 5:56pm

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