Can someone explain Income Tax in USA
#1
Forum Regular
Thread Starter
Joined: Sep 2014
Posts: 40
Can someone explain Income Tax in USA
Hi all
Can someone explain the income tax system in USA .
I'm hoping to be making a move soon on a Sponsered transfer. My income will be around the $80,000 annual. I am confused as I've researched I would fall under the 25% bracket however when I visited various usa income tax caculator websites non of them would tax at 25%......
Can someone explain roughly what I would be taxed including Social Security.....
I would be married head of household with 2 kids as dependants...
Please help me to get. Better understanding
Thx
Can someone explain the income tax system in USA .
I'm hoping to be making a move soon on a Sponsered transfer. My income will be around the $80,000 annual. I am confused as I've researched I would fall under the 25% bracket however when I visited various usa income tax caculator websites non of them would tax at 25%......
Can someone explain roughly what I would be taxed including Social Security.....
I would be married head of household with 2 kids as dependants...
Please help me to get. Better understanding
Thx
#2
Re: Can someone explain Income Tax in USA
You'll need to give your proposed location in order to get any meaningful advice, as tax rates vary by state.......
#4
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Joined: Sep 2014
Posts: 40
Re: Can someone explain Income Tax in USA
My monthly gross would be $6750....
What kind of Federal Income taxes would be deducted and Social Security deductions?
Thx!
What kind of Federal Income taxes would be deducted and Social Security deductions?
Thx!
#5
Re: Can someone explain Income Tax in USA
The US has a progressive taxation system, which means you are tax rates are based on the 'last dollar earned'. You first $1 is not taxed, but your $79,999 is taxed at 25% (or whatever the rate is). As such, it will never be 25% of 80k but an adjusted tax rate somewhat lower (your marginal tax rate).
The IRS just released the 'breakpoints' for when you jump between a rate:
IRS Announces 2014 Tax Brackets, Standard Deduction Amounts And More - Forbes
The money they "withhold" from your paycheque differs from "deductions" which is what you are able to take away from the income amount you pay taxes on. You get a "deduction", the government (done by the employer) "withholds" the taxes you owe.
The tax calculators give you a good idea in general of what to expect in your take home, but there are frequently minor little adjustments based on state and local income taxes (though not a problem in Texas). Anecdotally I never get a tax calculator to come out exactly the same as what I see in a paycheque but it's close enough for planning purposes.
The IRS just released the 'breakpoints' for when you jump between a rate:
IRS Announces 2014 Tax Brackets, Standard Deduction Amounts And More - Forbes
The money they "withhold" from your paycheque differs from "deductions" which is what you are able to take away from the income amount you pay taxes on. You get a "deduction", the government (done by the employer) "withholds" the taxes you owe.
The tax calculators give you a good idea in general of what to expect in your take home, but there are frequently minor little adjustments based on state and local income taxes (though not a problem in Texas). Anecdotally I never get a tax calculator to come out exactly the same as what I see in a paycheque but it's close enough for planning purposes.
Last edited by penguinsix; Oct 20th 2014 at 10:02 pm.
#6
Re: Can someone explain Income Tax in USA
I used this one with 2 deductions (your kids).
Salary Paycheck Calculator |Take Home Pay Calculator |ADP
Monthly Gross Pay
$6,666.67
Federal Withholding
$720.00
Social Security
$413.33
Medicare
$96.67
Texas Income Tax
$0.00
Net Pay
$5,436.67
Salary Paycheck Calculator |Take Home Pay Calculator |ADP
Monthly Gross Pay
$6,666.67
Federal Withholding
$720.00
Social Security
$413.33
Medicare
$96.67
Texas Income Tax
$0.00
Net Pay
$5,436.67
#7
Lost in BE Cyberspace
Joined: Jan 2008
Posts: 41,518
Re: Can someone explain Income Tax in USA
I think 'head of household' is different from 'married'.
#8
Forum Regular
Thread Starter
Joined: Sep 2014
Posts: 40
Re: Can someone explain Income Tax in USA
I used this one with 2 deductions (your kids).
Salary Paycheck Calculator |Take Home Pay Calculator |ADP
Monthly Gross Pay
$6,666.67
Federal Withholding
$720.00
Social Security
$413.33
Medicare
$96.67
Texas Income Tax
$0.00
Net Pay
$5,436.67
Salary Paycheck Calculator |Take Home Pay Calculator |ADP
Monthly Gross Pay
$6,666.67
Federal Withholding
$720.00
Social Security
$413.33
Medicare
$96.67
Texas Income Tax
$0.00
Net Pay
$5,436.67
#10
Lost in BE Cyberspace
Joined: Jan 2008
Posts: 41,518
Re: Can someone explain Income Tax in USA
http://en.m.wikipedia.org/wiki/Head_of_Household
#11
Re: Can someone explain Income Tax in USA
"Head of Household" is a status basically for a single parent who is raising a child (or dependent) without a partner. If you are married, you are not the head of the household (though in the 'English language' usage of the word, of course, you are, or more likely, your wife is :-)
Your filing status is likely married, filing jointly, with two kids. I say likely assuming your spouse is joining you on this trip and will be resident while you are resident (as compared to remaining in the UK for a few months to finish a project and possibly eligible to be a non-resident for tax purposes this year).
Head of Household -- What Does Filing As Head Of Household Mean For Your Taxes? - Forbes
#12
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Thread Starter
Joined: Sep 2014
Posts: 40
Re: Can someone explain Income Tax in USA
Great advice!! In that case I'd be married jointly !! Any other help on this subject appreciated!,
#13
Re: Can someone explain Income Tax in USA
I suggest you buy Turbo Tax and you can plug your numbers in. It's worth it when you file anyway.