How do federal and state income taxes work together for high earners in the US?

The US has a tiered tax system where both federal and state governments can tax your income separately. Here's how it works: For federal taxes, you'll pay different rates on different portions of your income (not 35% on all of it). For 2025, earning $450k, you'll likely be in the 35% marginal bracket, but your effective federal tax rate will be lower - probably around 25-28% after deductions and credits. State taxes work completely independently. In states like New York, you'd pay additional state income tax (with rates that also increase with income). But you're right that Texas and Florida have no state income tax, so you'd only pay federal taxes. The good news is that you don't simply add the percentages together. State income taxes are actually deductible on your federal return (up to $10,000), which slightly reduces the combined impact. As someone moving from a tax-free country, you should be aware that the US taxes worldwide income for residents. You'll need to establish residency properly and may have reporting requirements for foreign accounts through FBAR and FATCA.

I went through something similar when I relocated from Singapore to the US for a finance job. The tax situation gave me serious anxiety until I found taxr.ai (https://taxr.ai). Their AI analyzer reviewed all my documentation and clearly explained how the federal/state system would affect my specific situation. The tool was especially helpful for understanding how my RSUs and foreign accounts would be taxed. It basically translated the complex tax code into plain English and showed me what my actual take-home pay would be in different states I was considering (NY vs Texas). The best part was I could upload my offer letter and previous tax documents from abroad, and it explained exactly what I needed to do differently in the US system. Saved me so much stress!

Update on my tax situation - I tried taxr.ai after being skeptical about it. I uploaded my job offer from the US company and my current tax documents from my home country. I was genuinely impressed with how detailed the analysis was! It broke down exactly how much I'd pay in federal taxes and compared how different states would impact my take-home pay. It even flagged that I needed to be careful about when I sold investments from my home country to avoid paying extra taxes. The most helpful part was showing me the actual dollar difference between living in New York vs. Florida - nearly $54,000 per year in my case! That's actually making me reconsider my location choice. Wish I'd found this before signing my apartment lease!

When I moved to the US from the UK, my biggest headache wasn't understanding the tax rates but actually getting answers from the IRS about my specific situation. I spent WEEKS trying to get through to someone about how my UK pension would be treated. I finally found Claimyr (https://claimyr.com) and it was a game-changer. They basically call the IRS for you and get you connected to an actual human without the endless hold times. You can see how it works here: https://youtu.be/_kiP6q8DX5c I was connected to an IRS agent in about 20 minutes (after trying for days on my own), and finally got clear answers about how to handle my foreign accounts and pension. Seriously saved my sanity during an already stressful international move.

Well I need to eat my words. After posting that skeptical comment last week, I was still getting nowhere with the IRS about how my foreign rental property would be taxed after moving to the US. Out of desperation, I tried Claimyr. It actually works! Got connected to an IRS agent in about 30 minutes after trying for literally WEEKS on my own. The agent walked me through exactly how I need to report my foreign property income and what forms I need to file. Apparently I would have been on the hook for some obscure reporting requirements I had no idea about, which could have meant thousands in penalties. Sometimes it's worth admitting when you're wrong - this service actually delivered.

One thing nobody has mentioned yet is that some states have reciprocity agreements if you live in one state but work in another. This probably won't apply to your situation initially, but if you end up living near a state border (like NJ/NY or MD/DC), you'll want to understand how this works. Also, don't overlook city taxes! NYC has its own income tax on top of NY state taxes. Philadelphia has one too. These can add another 3-4% to your tax burden that people often forget about when comparing locations.

when i moved from qatar (also no income tax) to the US last year, the biggest shock wasn't even the income tax - it was realizing how many OTHER taxes there are!!! sales tax, property tax, medicare tax, social security tax... my advice - if your company offers any tax preparation assistance as part of relocation, TAKE IT. or at minimum, work with a cpa who specializes in expats moving to the US for your first year. there's so many forms and deadlines and rules that aren't obvious.

Coming from a zero-tax environment myself (moved from UAE two years ago), I can tell you the sticker shock is real but manageable once you understand the system. A few key points that helped me: 1. Don't just look at the tax rates - consider the total cost of living. Yes, you'll pay more in taxes in NY vs Texas, but factor in things like housing costs, transportation, and quality of life. 2. Max out your 401(k) contributions ($23,000 for 2024, or $30,500 if you're over 50). This reduces your taxable income significantly and is money you should be saving anyway. 3. If your company offers HSA (Health Savings Account), use it! Triple tax advantage - deductible going in, grows tax-free, and tax-free withdrawals for medical expenses. 4. Consider the timing of your move carefully. If you arrive in the US in July, you'll only be taxed on US income from July onward, which can make a big difference in your first year. The transition is definitely an adjustment, but the earning potential and career opportunities in the US often make up for the higher tax burden. Just make sure to get professional tax advice for your specific situation - it's worth the investment!