Nothing additional. Just pay your federal, medicare and social security. No additional state/local taxes in Houston/Texas. One caveat is that your home state (if it's not Texas) will probably have their hand held out since you're technically still a resident of that state, just working in TX. Should recoup most of that though in your state return next year.

Not taking any home state taxes into account, figure about 25% goes to fed/med/ss and you should net close to 8k. Of course, you'll also get a nice chunk of that back in next year's federal return too.

 

thanks. I am from Michigan. Do they automatically withhold for Michigan tax too? Or do I have to send tax in for Michigan? And how much do people usually get back from the returns if the internship is the only job i have in the year?

Thanks and sorry if this sounds stupid. I have never dealt with taxes before :-p

 

Whoever sets up your payroll will know to withold for Michigan state taxes if Michigan requires you to pay while working out of state. This is assuming of course that you've been using your home address when filling out paperwork.

If that's your only income this year, you should get most of it back. It would only be a couple hundred taken anyway so nothing to sweat.

Your bigger concern if you're gonna be in Houston is going to Monty's happy hour and getting free drinks...provided of course you're 21...

 
Best Response

Taxes are complicated. First off, congratulations on the offer.

Typically, your payroll tax will be withheld at an annualized income, so in this case, it would be withheld as if you were making $55k per year. I've worked at some jobs in college where my withholdings was shifted to 0 as they categorized me as a full time student. Try to see if they can do this, if it is possible (employment laws vary by state).

Your final tax liability could be 0, depending on how you file. Your total pay should be around 10k, and assuming you don't work the entire year, you should get 7-8k as a personal deduction and up to 5k for education deductions. You may be able to claim part time residency for tax reasons but be careful if you go to a state school as it may screw up your tuition rates. However, if your parents claim you as a dependent, then your income gets lumped in to their return.

If you file separately, you can claim tax residency in TX while you are there. You are going to be physically living and working there in that period. You may even be able to claim relocation expenses on the tax return. If you file as a dependent, you are likely going to have to claim michigan tax residency for the entire year. However, it is unlikely that they will withhold MI taxes, and will probably only withhold to TX's level.

I'm not a tax expert, so a standard disclaimer is that this is my best guess, but you should consult a tax expert and follow their advice.

My advice, try to get as little withheld as possible, then chat with your parents and maybe get a tax guy to see what is best for all of you.

 

Sequi et sed sunt ducimus et earum. Et in quia maiores sint. Ut voluptatibus cupiditate ipsam voluptates.

Consequuntur dicta cumque velit odio aut. Enim id accusamus harum mollitia est et. Corporis officiis eius in officia laborum.

Odio et est cupiditate esse sunt. Rerum voluptas eaque et ipsum reprehenderit expedita aut. Quo pariatur amet est a commodi quae esse velit.

Career Advancement Opportunities

March 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Goldman Sachs 19 98.8%
  • Harris Williams & Co. (++) 98.3%
  • Lazard Freres 02 97.7%
  • JPMorgan Chase 03 97.1%

Overall Employee Satisfaction

March 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

March 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

March 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (19) $385
  • Associates (86) $261
  • 3rd+ Year Analyst (13) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (66) $168
  • 1st Year Analyst (202) $159
  • Intern/Summer Analyst (144) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”