NY & NJ Tax 101

Tax Type

1. What you buy

   1. Sales tax

2. What you earn

   1. Income Tax -> fund state level

3. What you own

   1. Property Tax -> Fund local level

Income Tax

Federal / State Income Tax

Usually Progressive
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Corporate Income Tax

A corporate income tax (CIT) is levied by federal and state governments on business profits, which are revenues (what a business makes in sales) minus costs (the cost of doing business).

Payroll Taxes

Payroll taxes are taxes paid on the wages and salaries of employees (to finance social insurance programs).

Looking at their paystub at the end of each pay period, where the amount of payroll tax withheld by their employer from their income is clearly listed.

In the U.S., the largest payroll taxes are a 12.4 percent tax to fund Social Security and a 2.9 percent tax to fund Medicare, for a combined rate of 15.3 percent. Half of payroll taxes (7.65 percent) are remitted directly by employers, with the other half withheld from employees’ paychecks.

Payroll = Social Security Tax(FICA) + Medicare Tax
FICA is a U.S. federal payroll tax. It stands for the Federal Insurance Contributions Act and is deducted from each paycheck.

Capital Gain Taxes

In jurisdictions with a capital gains tax, when a person “realizes” a capital gain—i.e., sells an asset that has increased in value—they pay tax on the profit they earn.

It is a Double Tax, meaning that same salary is taxed twice

Sale Tax

Usually state-wide,

Property Tax

Property taxes are primarily levied on immovable property like land and buildings and are an essential source of revenue for state and local governments in the U.S

Also, Tangible Personal Property Taxes

W-4

1. Employers withhold payroll taxes and income tax from employees’ pay.
2. Employers send the amounts withheld to the federal government.
3. Employees complete Form W-4.
4. Employers use Form W-4 to determine how much income tax to withhold from employee pay

W-4 determine how much federal income tax to withhold

NY & NJ Tax

https://taxfoundation.org/state/new-jersey/