You may have extra paperwork if you live in New York City or Yonkers, since those cities assess local income tax on top of state tax. 5 Stars, 4.2 They determine what portion of your income the state will tax. Unearned income isn't subject to Social Security or Medicare taxes, but it still contributes to your tax burden. That's why you're being asked about Yonkers. Live Assisted Basic is free through March 31. In fact, the IRS provides a handy calculator that figures out the tax withholding on your income, so you can brace yourself ahead of time. In some cases, we receive a commission from our partners; however, our opinions are our own. Retirement plan contributions won't reduce your Social Security and Medicare taxes. You wont pay for TurboTax until its time to file and youre fully satisfied. Accessed Nov 14, 2022.View all sources. Get the latest tips you need to manage your money delivered to you biweekly. This comes in handy if you expect your income to decrease in the new year, or if you expect your deductions to increase substantially enough to offset the taxes for example, if you're planning to buy a house. [6] This would level the playing field for debt financing and equity financing in a way that would help American families by boosting economic growth. See Yahoo Finance, Composite Bond Rates, http://finance.yahoo.com/bonds/composite_bond_rates (accessed September 23, 2015). "A lot of time employers like to pay holiday bonuses in December because they're able to write that off if their books close December 31," Greene-Lewis explains. You can be disqualified from claiming them if you dont. Electronically filed the return.