Help (US taxes)
- Thread starter Arano
- Start date
djmtott
What's my name again?
A lot depends on what you claim on your W-2. For me, I have them take out the maximum amount, and if I did my math right it comes up to about 19% of my pay. Which comes out to $4,860 if you divide that by 12. But, if you get paid every 2 weeks that's 26 paychecks a year, or $2,243.07 per paycheck. Also keep in mind the tax codes vary from state to state, but overall it shouldn't be that much of a difference.OK, I have some trouble understanding the US tax code, can someone give me a crash course, if possible. Let's say, single guy making $72,000 / year, so it divides by 12How much you get to keep on a monthly basis ?
Tiveria
Sheeptastic!
First, it depends on what is called your "taxable earnings". To get your taxable earnings, you need to deduct all non-taxable earnings from your gross pay.
If you make say $1500 a pay period, and have non-taxable deductions for Medical and Dental Insurance for say $50 and $10 respectively, you would take away $60 from that $1500. Also deduct a 401k, Health Care Reimbursement Accounts, etc. Just don't deduct a 401A (think after tax, it's not what the a stands for, but it's a helpful reminder). Take all that away to get your taxable earnings.
John Doe:
$1500 gross pay
$50 Medical
$10 Dental
$50 HCRA
$24.12 401k
-----------------------
$1365.88 Taxable Gross Income.
(FYI all that non-taxable insurance is called a Cafeteria Plan. If you see either 135 or cafeteria plan on your W-2, that's why! It has to do with the law that was created to make these deductions non-taxable.)
Now, you need to know how you are paid. Are you paid, bi-weekly, weekly, semi-monthly? All of the information you'll find on the fed site is based on different tables based on the time period you get paid.
There's also federal, state, and sometimes local taxation. Kentucky has about 4 taxes you have to pay!! (fed, state, county and school!)
For Federal, check out a calculator from the IRS. But this is where you can find the tables.
My Joe above is bi-weekly, and married. So he follows this table. If he files Married 00 (which generally means the wife works, and no kids), he would have $130.00 taken from his paycheck. It may be slightly off depending on how your company calculates taxes (some companies use the percentage method, which is a bit more complex to explain).
As far as HOW you should file. Well, for example, in CT, we have a special filing for students (F), which gives them a discount on taxes. Also, if you make less than a certain amount (Sorry it's been a year or two since I worked in the tax dept of payroll so the laws have changed), you don't have to pay taxes at all!
Tirrem
New member
I tend to just take what I would make a month and take 20% out. This all depends on what you claim on your W-2 and wether you live in a state that has sales tax or not. For example I did live in Idaho and they only took 15-20% depending on how big the check was out, now I live in oregon and they will probably take 3-5% more out since there is no sales tax. Also the more you make the more they take out too my buddy makes 45k and they take almost 1k a month out in taxes being single.
Thank you guys. Finally, another noob question: how would you categorize a gross salary between 60k - 70k a year on the east coast (NJ, NY, PA of special interest) for a guy who would need to pay rent, gas and eat once in a while ? Low, average, above average, good, very good etc. ?
Also, anyone here working in IT (software development) ? I'd like to PM a couple of questions.
Thanks
Also, anyone here working in IT (software development) ? I'd like to PM a couple of questions.
Thanks
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Stomis
New member
I'm pretty sure thats more than the average. I would say that is the top of decent breaking into good. From everything I'm taking in about the real world a single guy should be able to live worry free on that with money to spare. Of course if you live in a city that changes things but residentially with the right money management your ok to go make payments on a porsche.
Tiveria
Sheeptastic!
depends on where you live. NYC that would be really low - same with Boston. CT that's a little more (It's more than I make) I'm not sure on Philly. NYC you want a bit more because Cost of living is really high.
djmtott
What's my name again?
Well, Manhattan is the most expensive place to live in the US. You need to make 3 times the money you'd normally need in most other places. From there it gets cheaper as you move out of the city. The one thing I can tell you for sure is the area of north NJ is about an hour out of NYC and I've seen one bedroom apartments cost almost $1,500 a month.
But for the area, for a single man to get by I'd say that amount is ok. You'll be able to live, but you're not going to have a lot of money left over.
Tiveria
Sheeptastic!
my apartment in CT is over $1k a month. Snobby towns FTL!