- Withholding is accomplished by filling out IRS Form W-2. This form is normally completed when you are hired by your employer. The employer gives you the form, and you specify how much money you want withheld from your paycheck. You may change this withholding amount at any time during the year.
- Where you live in New York makes a difference. New York State assesses income tax on everyone living in New York. However, New York City residents must pay an additional tax on top of the state income tax. Finally, Yonker's residents must pay an additional tax. This dramatically affects how much is withheld from your paycheck.
- You benefit by being able to change your withholding during the year. You also benefit if you do not live in Yonkers or New York City. Staying out of these higher tax areas means you pay less in income taxes in New York. The fact that you may change your withholding in New York means there's no need to overpay your taxes only to receive a refund when you file your return.
- You may use the IRS's withholding calculator to change your federal withholding. This calculator may prove useful at the state level as well. Using the IRS's calculator to estimate your state withholding gives you the option to save the money you would otherwise pay in taxes and invest this money for your future.