tax

[MarknSue]

Just out of interest, anybody surfing the boards at the mo who knows anything bout the US tax system (Im from UK!).
In particular, if someone were to accept a job paying 50,000 dollars, how much would they actually have in their pocket at the end of the year? How much is paid to eg state or federal agencies?
Odd question I know, but I did think Id ask
Mark

 

[TURKEY]

It depends on where you live, how you would file your taxes, and if you would both be earning incomes.

Check your PM for more details.

 

[Nut4Disney]

Not sure where you would be living but I think that the taxes coming out of my paycheck total around 28%, that is in Ohio & Kentucky. I'm sure it is probably more in other states.

 

[DanStat]

There are different "tax brackets" that also affect your income.

 

[EnSkywalker]

It truly depends on the State, County(Province) you live in.

My paycheck for example is roughly a net take home of 73% after discounting for 401k contribution. This includes Federal tax, State Tax, County tax, Social Security, and health/dental benefits (or lack there of as the trend has been lately).

Some states have no state income tax. Washington State comes to mind but I know there are a couple of others. They make up for this by higher sales taxes, auto licensing taxes, property taxes.... You get the idea.

I'm sure there is a utility somewhere on the web that will factor all of this in somewhere on the web.

Next you have to take into cost of living differences. For example, my sister shares an apartment (flat) with two other women in Chicago. (4 blocks from Wrigley field) Her share of the rent is more expensive than my principal and interest payment on my house which is about 15-20 minutes north of indianapolis.

I don't know how to compare England to the US but I could ask some friends who moved from Portsmouth to here a year or to ago.

Hope this helps.

 

[The Mom]

The US tax code is incredibly complex! (That's why I pay a CPA big bucks to prepare our return!)

Aside from the differing tax brackets, assorted state income, (FL has none) sales, property, city, etc taxes, there are also a variety of deductions....with varying eligibility requirements! For instance, you can deduct some medical expenses...as long as they exceed a certain percentage of your income. The same goes for child care credit, and various other things. (I don't pay much attention....we always exceed the "phase-out" limits.)

Basically, I've been paying taxes for years, and still have no idea how much the actual taxes will be until they're filed! Some years we've had too much withheld, some years too little....and the rules keep changing!

 

[MarknSue]

this is all great stuff - thanks everyone!
does anyone know where i could find the utility ensky has mentioned?
(and can i apologise for starting the days most boring thread!!)
mark

 

[Tramp]

Mark....

For tax year 2001, A married couple filing a FEDERAL joint tax return in the US making a gross income of $50,000 with no deductions or adjustments to income would owe $5,490 at the end of the year.

Even though your GROSS pay is $50K, the government generously gives you a standard deduction of $7,600 and personal exemptions for you and Sue of $2,900 each...this is a total deduction of 13,400 making you liable for taxes on $36,600...you would be in the 15% tax bracket at this income level....(up to $45,200)

State and Local taxes vary from state to state....

...please understand that there are a MULTITUDE of ways to reduce your tax liability. The above example assumes you have not taken advantage of any of our gazillion loopholes.

...I do not nor did I ever work for Arthur Anderson, I swear!:lol:

 

[The Mom]

Gee Tramp, now I feel even worse about the tax structure! If someone were to make 6 times the income of your hypothetical couple, they would owe almost 20 times the taxes....and still people would complain that they weren't paying enough!

 

[jmarc63]

Originally posted by EnSkywalker
It truly depends on the State, County(Province) you live in.

My paycheck for example is roughly a net take home of 73% after discounting for 401k contribution. This includes Federal tax, State Tax, County tax, Social Security, and health/dental benefits (or lack there of as the trend has been lately).

Some states have no state income tax. Washington State comes to mind but I know there are a couple of others. They make up for this by higher sales taxes, auto licensing taxes, property taxes.... You get the idea.

I'm sure there is a utility somewhere on the web that will factor all of this in somewhere on the web.

Next you have to take into cost of living differences. For example, my sister shares an apartment (flat) with two other women in Chicago. (4 blocks from Wrigley field) Her share of the rent is more expensive than my principal and interest payment on my house which is about 15-20 minutes north of indianapolis.

I don't know how to compare England to the US but I could ask some friends who moved from Portsmouth to here a year or to ago.

Hope this helps.

enskywalker, Also Floridia has no personal income tax but a higher corporate taxes compared to other states

 

[jmarc63]

another thing to consider is are you still residents of the the UK, are you here on work visas or are you here permanatly.. This would be a consideration of weather you pay US taxes or Home Country taxes

 

[mkt]

geez.. I just let my CPA take care of it... or let my former legal guardians file me (i'm only 20!) and get more back

 

[Debbie]

Also to consider: How you are paid I.E. If the firm would pay you as a contractor and you receive a form 1099 at the end of the year. Or you would be considered an employee and receive a w-2.
Being a contractor and with that getting 1099'd has been a bit scary for us. We get taxed at the normal rate (our deductions got us to a 15% tax bracket). Then we are taxed an additional 15% for self employment. Thank goodness we have 5 deductions right off the bat.
We are finished putting into Social Security so if I would get another job working for someone (and not myself) then it would make sense to get a job with a pension plan and not have to put into FICA anymore.

 

[The Mom]

Originally posted by Debbie
[B.
We are finished putting into Social Security so if I would get another job working for someone (and not myself) then it would make sense to get a job with a pension plan and not have to put into FICA anymore. [/B]

Are you sure about that? My husband has a 403b and a company pension, but still pays maximium FICA. I suppose it depends upon how it's set up, company contributions, etc. Who knows??!!! The tax code just keeps getting more convoluted every year! :brick: