MCT567

Hi all - we're trying to understand what our take-home salary in California will be when we arrive however the world of tax, deductables, HSA's etc is all a bit of a mystery and minefield to us.

Does anyone have a recommendation of anyone who would be able to clear this mystery up and help us forecast and budget?

Thanks in advance!

Winston_the_Great_Dane

Use the smartasset.com salary calculator to give you an idea of take home for CA.

Only you can determine your healthcare budget based on employer plan. For a family, max HSA contribution is $7200 p.a.

Don't forget to take out money for 401k too.

Good luck

Glasgow Girl

You could get a rough idea of taxes by getting a free account with Turbo Tax, and going through the online interview process. The online interview will ask you questions customized to your situation. If you enter some rough numbers it will give you a rough idea of what you will pay and why. You can enter dummy information for personal details so don’t get hung up on not having an SSN to enter etc. It will remember you if you use it to file taxes for real in the future, so you might want to make a dummy account to play with and use a different account long term. I do this all the time when planning out different tax strategies for future years. You can use Turbo Tax for federal and state (including local tax).

For medical expenses your employer ought to be able to give you some guidance, but you have to plan for your share of the monthly premium, plus 100% of your expenses up until you reach your deductible which is a limit set by your plan. After your expenses meet the deductible then typically the plan will pay a percentage of any further expenses up until you hit the out of pocket limit. The percentage paid is typically 50% but will vary by plan. Once you hit the out of pocket maximum the plan will pay 100% of your expenses. Worst case scenario is you will have to pay the maximum out of pocket limit plus your share of the premium. What your expenses will be depends upon your health, no one can predict that. HSA’S are essentially a voluntary tax deductible savings account so long as the funds are used forhealth expenses. Some employers contribute, some don’t, there are limits on what you can contribute. If the employer contributes there are rules as to whether or not the funds roll over from one year to the next or if you lose them at year end.

If you budgeted for annual health premiums and your maximum out of pocket limit then unless you are very unlucky you will have a nice amount left over at the end of the year. After a couple of years you will get the hang of it and be able to budget with precision. Don’t forget dental, that is very expensive.

tht

If it is just W2 employment and you know your benefits costs and you have no other taxable investments / businesses / property and will live in a rental you can input it in to a simple online calculator based on state/city and number of dependents to get a worst case estimate. Then any extra deductions are a bonus. But for most professionals it’s more complex. Once you have 2-3 years worth you get a sense, and understand how to be proactive in planning.

I use my 2020 Turbo Tax to “forecast” for 2021, but for 2022 there are some new variables depending on the BBB. Like if SALT cap will be raised again, larger possible EV credit, with a tight 2nd hand car market, I may be able to trade in my 2016 for a 2022 EV and pay little or no extra.