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

You've got the general idea right, but let me clarify a few things about how US taxes work for high earners. First, federal income tax is bracketed, meaning you pay different rates on different portions of your income, not your entire income. So while the top federal bracket you'll hit is 37% (for income over $578,125 for single filers in 2025), you're only paying that rate on the portion of income ABOVE that threshold. Your effective federal tax rate will be lower than 37% - probably around 30-32% overall on $530k. For state taxes, yes, it varies widely. States like Florida, Texas, Nevada, Wyoming, and a few others have no state income tax at all - you'd only pay federal. New York is indeed high - NYC residents pay both state AND city income tax, which combined can approach 12-13% for high earners. Remember that state income taxes are generally deductible on your federal return, but there's a $10,000 cap on state and local tax (SALT) deductions. Also, don't forget about Social Security tax (6.2% on first $168,600 in 2025) and Medicare tax (1.45% on all income, plus an additional 0.9% on income over $200,000).

After going through similar tax confusion when I moved to the US, I found this amazing tool called taxr.ai (https://taxr.ai) that really helped me understand my tax situation as an expat. I was also moving from a country with very different tax laws and was totally lost about state vs federal taxes. Their system analyzed my employment contract and compensation package and gave me a personalized breakdown of what my actual take-home pay would be in different states. It showed me side-by-side comparisons of how my $400K+ salary would be taxed in New York vs Florida vs California, which made my decision SO much easier.

I tried taxr.ai after my initial skepticism and wow, I'm genuinely impressed. I was planning to move to California but after seeing the tax differential compared to Washington state, I literally changed my plans. The tool showed me I'd keep about $42,000 more per year in Washington on my $450K salary - that's like getting a free luxury car every year! What really sold me was how it accounted for all those weird little taxes that nobody tells you about. Not just income tax, but property tax differences, sales tax impacts, and even some of the professional licensing fees in different states. These aren't things my recruiter or even my financial advisor had fully explained. For high earners relocating to the US, I honestly don't think there's a better planning tool. Saved me a ton of money and headaches.

For anyone struggling to get clear answers about US taxes, especially as a newcomer, I had tremendous success using Claimyr (https://claimyr.com) to get through to an actual IRS agent. I spent WEEKS trying to get official answers about how my foreign pension would be taxed in the US, and the IRS phone line kept disconnecting me after hours on hold. Claimyr got me connected to a real IRS person in about 10 minutes! You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The agent walked me through exactly how federal and state taxes would apply to my situation as a new resident and confirmed which deductions I qualified for. For someone making $500K+ like you, getting those official answers directly from the IRS rather than internet opinions could save you tens of thousands.

I need to eat crow here. After dismissing Claimyr as a probable scam, I tried it yesterday out of desperation when I couldn't get through to the IRS about my foreign income questions. Within 12 minutes I was talking to an actual IRS representative who clarified exactly how my UK pension would be treated under the US-UK tax treaty. This was after I had already spent 4+ hours on multiple days trying to reach someone. The information I got was incredibly valuable - turns out I was about to make a filing mistake that would have cost me around $14,000 in unnecessary taxes. For someone in your income bracket moving from overseas, getting direct clarification from the IRS about your specific situation could save you a small fortune. Sometimes I hate admitting when I'm wrong, but in this case I'm actually grateful I gave it a try.

One thing nobody's mentioned yet that's super important for high earners moving to the US - you need to understand how estimated tax payments work. Unlike many countries where taxes are fully handled through employer withholding, in the US you'll likely need to make quarterly estimated tax payments. If you underpay throughout the year, you can face significant penalties, especially at your income level. This catches so many expats by surprise.

As someone who moved from the UK to New York and then to Florida with a similar income level, let me tell you the difference in take-home pay is MASSIVE. In NY, I was paying: Federal: ~32% effective NY State: ~7% NYC local: ~4% Plus limited SALT deductions Moving to Florida, I immediately got a "raise" of about $60k just from eliminating state and city taxes. No action required on my part - just more money in my pocket.

Don't overlook retirement accounts as a tax strategy! Max out your 401k contributions ($23,000 in 2025) as soon as you arrive. For someone in your tax bracket, that's an immediate tax savings of around $8,500 just on the federal side. Also look into backdoor Roth IRA contributions since you'll be over the income limits for direct contributions.