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Take home pay question

Take home pay question

Old Aug 22nd 2014, 9:28 am
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Default Take home pay question

Hi all,

This is my first post so please be gentle and apologies if im in the wrong section

Very quick question , I'm looking at relocating to the west coast in January with my current employer , I would be moving over on an e2 employe visa with my wife and 2 year old daughter and am looking for places to rent obviously where I can afford is going to be dependent on take home salary and I have a rough idea but my question is what would my status be when using the salary take home calculators as I'm getting mixed information from our HR people and other staff I know from the uk who have moved over

I presumed it would be married but am being told by hr it would be single and there is around $600 / $700 dollars a month difference

Any pointers appreciated

FYI were looking at Sacramento / Denver or Portland and the move would be January (end of the month)

Thanks in advance

Last edited by Jgalla5400; Aug 22nd 2014 at 9:34 am. Reason: missed a line !
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Old Aug 22nd 2014, 11:50 am
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Default Re: Take home pay question

If you are married you have to file as married but can then chose between filing jointly with your spouse or individually. For most people jointly is more tax efficient.
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Old Aug 22nd 2014, 11:56 am
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Default Re: Take home pay question

Take home tax is hard because you may or may not be liable for State and city (potentially where you work and live) as well as things like health insurance, dental insurance, vision insurance, disability insurance and other miscellaneous items that may come out of your check pre or post tax. Also, depending on what sort of tax write off items you have (mortgage interest, number of kids, property tax and a whole host of other things) you can pay less tax throughout the year. Basically it will be up to you to figure out what you want to pay in federal and maybe state tax, based on your witholding number, and then either pay extra with your tax return or get a refund for overpayment. It's not easy and kind of trial and error initially. Once you get a few full paychecks you can start running things through tax software like TurboTax to get an idea of where you are.
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Old Aug 22nd 2014, 11:58 am
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Default Re: Take home pay question

Perfect thanks

Not sure why my HR people in the US are saying single (unless my wife has told them something I don't know yet)

Presumable when they pay me each month they will enter something on the system that says I am married and its all done via payroll (adp I think they use)
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Old Aug 22nd 2014, 12:02 pm
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Default Re: Take home pay question

You should be able to get a decently accurate calculation, including state taxes, using the calculator at Paycheck Calculators | Online Payroll Calculators | Paycheck City .
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Old Aug 22nd 2014, 12:05 pm
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Default Re: Take home pay question

Sounds like it would just be easier to relocate to Nevada

Thanks for the reply's
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Old Aug 22nd 2014, 12:15 pm
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Default Re: Take home pay question

Originally Posted by rpjs View Post
If you are married you have to file as married...
For tax returns, yes... but not for source deductions on payroll. I'm married, but claim the single rate on my payroll deductions because they take out more taxes at the source and then I get a nice refund after I file taxes.

Unless I'm mistaken, this is what the guy's HR department is suggesting.

Ian
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Old Aug 22nd 2014, 12:18 pm
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Default Re: Take home pay question

Originally Posted by ian-mstm View Post
For tax returns, yes... but not for source deductions on payroll. I'm married, but claim the single rate on my payroll deductions because they take out more taxes at the source and then I get a nice refund after I file taxes.

Unless I'm mistaken, this is what the guy's HR department is suggesting.

Ian
That certainly explains it

Thanks for the reply's

I guess if I base it on single at least it wont be any lower !
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Old Aug 22nd 2014, 12:29 pm
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Default Re: Take home pay question

Originally Posted by Jgalla5400 View Post
Not sure why my HR people in the US are saying single (unless my wife has told them something I don't know yet)
They may be going off something like this. You are a non-resident alien. But assuming you spend a sufficient amount of days in the US next year you will end up being treated as a resident alien for tax purposes (google "substantial presence test"). So you will (probably? all the resident/non-resident stuff in IRS publications brings me out in hives, because sometimes they're using their own special definitions of those words) have the ability to file jointly in the future, but you don't have it yet.

Last edited by zerlesen; Aug 22nd 2014 at 12:33 pm.
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Old Aug 22nd 2014, 12:56 pm
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Default Re: Take home pay question

I will be (as far as I am aware) going on the E2 employee visa for 5 years at least that's what we have done for others and seems common practice with the company I work for

What you said makes sense about the Non-Resident / Resident stuff I think the first year will be the one when I don't fall into resident status and will take the tax hit and hopefully as Ian said get a nice refund upon filling returns
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Old Aug 22nd 2014, 1:08 pm
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Default Re: Take home pay question

Originally Posted by ian-mstm View Post
...... I'm married, but claim the single rate on my payroll deductions because they take out more taxes at the source and then I get a nice refund after I file taxes. ....
I'm glad there are people like you, making interest-free loans to the US government. That is such a patriotic thing to do.
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Old Aug 22nd 2014, 1:27 pm
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Default Re: Take home pay question

Originally Posted by ian-mstm View Post
For tax returns, yes... but not for source deductions on payroll. I'm married, but claim the single rate on my payroll deductions because they take out more taxes at the source and then I get a nice refund after I file taxes.

Unless I'm mistaken, this is what the guy's HR department is suggesting.

Ian
My company's W2 (or W4? I always forget which is which) doesn't just let you choose between single and married, it has three options: single, married, or married but deduct at the single rate. I thought most or all were like that.
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Old Aug 22nd 2014, 1:44 pm
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Default Re: Take home pay question

Originally Posted by Jgalla5400 View Post
That certainly explains it

Thanks for the reply's

I guess if I base it on single at least it wont be any lower !
You will be given this form to complete by your employer, letting you choose the way that you prefer your pay cheque to be calculated:

http://www.irs.gov/pub/irs-pdf/fw4.pdf

Then by April 15 of the following year, you file a tax return that ensures that you paid enough (or enables you to get some money back!). If your state has an income tax, there will be a commensurate form to complete for the state withholding.
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Old Aug 22nd 2014, 4:05 pm
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Default Re: Take home pay question

Originally Posted by Owen778 View Post
My company's W2 (or W4? I always forget which is which) doesn't just let you choose between single and married, it has three options: single, married, or married but deduct at the single rate.
Sorry, yes - this is what I meant... deductions at the single rate. I should have been more clear.

Ian
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Old Aug 22nd 2014, 6:14 pm
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Default Re: Take home pay question

Originally Posted by Jgalla5400 View Post
I will be (as far as I am aware) going on the E2 employee visa for 5 years at least that's what we have done for others and seems common practice with the company I work for

What you said makes sense about the Non-Resident / Resident stuff I think the first year will be the one when I don't fall into resident status and will take the tax hit and hopefully as Ian said get a nice refund upon filling returns
In the US, you have to claim worldwide income as a resident. For most people that will only be in the US for a few months during the first year, it's usually better to claim as a non resident and not be able to take all the deductions. There is the ability to opt for residency but usually for only a few months, it is better to file as a non resident. During the second year, you don't have a choice and will have to file as a resident but then you get to claim all the deductions and tax credits as any American or resident.
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