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Taxes taxes taxes???

Taxes taxes taxes???

Old Apr 12th 2011, 5:55 pm
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Question Taxes taxes taxes???

Is there anywhere on ye gods green earth or on t'interweb that I could roughly determin what a net salary would be for a given pre-tax salary and family situation?

I have a bit of leeway for salary negotiation for a potential job. The employer is quoting gross with pre-tax health and pension deductions which goes part of the way but I don't know what the taxman will take away on top of that and what benefits I could claim back.

I thus can't really gauge if I am getting a good offer or not.

I would be a head of family with non-working spouse and two children (3yrs and 1yr) to live in Virginia.

Thanks for any help.
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Old Apr 12th 2011, 6:54 pm
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Default Re: Taxes taxes taxes???

Don't know if this will help or not:

http://www.irs.gov/pub/irs-pdf/p15.pdf#15
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Old Apr 13th 2011, 12:30 am
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Default Re: Taxes taxes taxes???

Originally Posted by Fabian23 View Post
Is there anywhere on ye gods green earth or on t'interweb that I could roughly determin what a net salary would be for a given pre-tax salary and family situation?

I have a bit of leeway for salary negotiation for a potential job. The employer is quoting gross with pre-tax health and pension deductions which goes part of the way but I don't know what the taxman will take away on top of that and what benefits I could claim back.

I thus can't really gauge if I am getting a good offer or not.

I would be a head of family with non-working spouse and two children (3yrs and 1yr) to live in Virginia.

Thanks for any help.
Sorry Fabian, it´s not as easy as that. In the US, there are so many possible deductions that it´s impossible to give a quick answer. For example, you may be able to have mortgage interest deductions, state tax deductions, local tax deductions, deductions for interest on a second home, which from what I remember can even include a boat if it has a small kitchen and a toilet. You should be able to claim for donations which even include when you give stuff away to the Salvation Army etc; the list goes on and on. In some ways it´s good that there are so many possible deductions, but you´ll need to either read one of the 1001 books available which explain all this in simple terms or pay an accountant.
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Old Apr 13th 2011, 1:10 am
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Default Re: Taxes taxes taxes???

Originally Posted by Fabian23 View Post
Is there anywhere on ye gods green earth or on t'interweb that I could roughly determin what a net salary would be for a given pre-tax salary and family situation?
Yeah, there are loads.

http://www.paycheckcity.com/netpayca...calculator.asp

https://401k.fidelity.com/public/con...TakeHomePayCal

http://us.thesalarycalculator.co.uk/salary.php

You get the idea....though the first one is a pretty good one to get an idea.
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Old Apr 13th 2011, 1:13 am
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Default Re: Taxes taxes taxes???

For federal income tax you can use the following calculator.

http://www.dinkytown.net/java/Tax1040.html

If you have children under 18, they are eligible for the child tax credit in the exemptions selection. If both of you are working and you have children in day care or an authorized nanny, you can get a child care tax credit up to $3,000 per child or $6,000 for two or more. The credit is subtracted from taxes owed.

http://www.irs.gov/newsroom/article/...106189,00.html

If you have unearned income that is long term capital gains or qualified dividends (most dividends), those are taxed at a maximum 15%.

If you own a house, you can deduct home mortgage interest and property taxes as well state income tax, personal property tax (car licence fee), chartable donations, and other deductions from your income so the tax may be lower (itemizing deductions instead of using the standard deduction). In high income tax states you may pay less federal income taxes since you get to deduct state income taxes from you income plus other deductions but that amount must exceed the standard deduction to be beneficial. If deductions are too great, your income is very high (typically above $250,000 including bonuses and stock options), and/or you have a large amount of income taxed at 15% or less, there may be an Alternate Minimum Tax (AMT) that might be paid in addition to federal income tax.

http://apps.irs.gov/app/amt2010/index.jsp?ck

You will pay 5.65% (7.65% in all years other than 2011) of your income (after contributions to tax free retirement plans and company cost of any benefits will not be included as income) for FICA taxes (social security and medicare) on the first $106,800 of your income. After that it is reduced to 1.45% for medicare only since social security is not collected after $106,800.

Since you didn't say which state you will be living and working in, I can't help you with that. Some states do not have an income tax (about 5 states) and others have a state income tax up to 9.3% after deductions and exemptions.

There are a few cities (mostly on the east coast and mid west) that charge a small city tax (typically less than 1%).

Since you didn't say which state you would be living in, you should use the cost of living calculator. Compare New York City (should be similar in cost to London) to your city to get typical costs of different items.

http://www.bankrate.com/calculators/...alculator.aspx

Last edited by Michael; Apr 13th 2011 at 1:35 am.
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Old Apr 13th 2011, 7:49 am
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Default Re: Taxes taxes taxes???

Originally Posted by Michael View Post
For federal income tax you can use the following calculator.

http://www.dinkytown.net/java/Tax1040.html

If you have children under 18, they are eligible for the child tax credit in the exemptions selection. If both of you are working and you have children in day care or an authorized nanny, you can get a child care tax credit up to $3,000 per child or $6,000 for two or more. The credit is subtracted from taxes owed.

http://www.irs.gov/newsroom/article/...106189,00.html

If you have unearned income that is long term capital gains or qualified dividends (most dividends), those are taxed at a maximum 15%.

If you own a house, you can deduct home mortgage interest and property taxes as well state income tax, personal property tax (car licence fee), chartable donations, and other deductions from your income so the tax may be lower (itemizing deductions instead of using the standard deduction). In high income tax states you may pay less federal income taxes since you get to deduct state income taxes from you income plus other deductions but that amount must exceed the standard deduction to be beneficial. If deductions are too great, your income is very high (typically above $250,000 including bonuses and stock options), and/or you have a large amount of income taxed at 15% or less, there may be an Alternate Minimum Tax (AMT) that might be paid in addition to federal income tax.

http://apps.irs.gov/app/amt2010/index.jsp?ck

You will pay 5.65% (7.65% in all years other than 2011) of your income (after contributions to tax free retirement plans and company cost of any benefits will not be included as income) for FICA taxes (social security and medicare) on the first $106,800 of your income. After that it is reduced to 1.45% for medicare only since social security is not collected after $106,800.

Since you didn't say which state you will be living and working in, I can't help you with that. Some states do not have an income tax (about 5 states) and others have a state income tax up to 9.3% after deductions and exemptions.

There are a few cities (mostly on the east coast and mid west) that charge a small city tax (typically less than 1%).

Since you didn't say which state you would be living in, you should use the cost of living calculator. Compare New York City (should be similar in cost to London) to your city to get typical costs of different items.

http://www.bankrate.com/calculators/...alculator.aspx
Thanks for the very useful sites. We would be located in or around Alexandria VA. Unfortunately they give wildly different result since they ask for different things, some of which I don't know the values for....

I intially would be the only earner and we have two pre-school children and filing as a married.
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Old Apr 13th 2011, 8:32 am
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Default Re: Taxes taxes taxes???

Originally Posted by Fabian23 View Post
Thanks for the very useful sites. We would be located in or around Alexandria VA. Unfortunately they give wildly different result since they ask for different things, some of which I don't know the values for....

I intially would be the only earner and we have two pre-school children and filing as a married.
The federal income tax calculator should give you a fairly accurate estimate. Use married filing jointly, check personal exemption, spouse exemption, dependents = 2, and dependents qualifying for tax credit = 2. Put your income under wages, salaries, tips, etc. That should give you the maximum taxes owed unless you have unearned income. If you have unearned income that is long term capital gains add 15% of that income to the taxes owed. If it is short term capital gains or interest, just add that to your income.

You won't get the child care tax credit since your wife won't be working. It is unlikely that you will be able to to itemize deductions since you would need deductions in excess of the standard deduction of $11,400.

AMT probably won't enter in to your situation so don't worry about that.

You should be able to calculate FICA yourself.

The following is the Virginia marginal tax rates. Use the taxable income (income after deductions) displayed on the previous federal income tax calculator that you used to determine the amount of taxes you owe in Virginia.

Example: Using the previous calculator with $100,000 of income with filing jointly, with exemptions checked for yourself and wife, 2 dependents, and 2 children eligible for child tax credits, the calculator will indicate $73,600 in taxable income. The Virginia tax on that will be $720 + (($73,600 - $17,000) * 0.0575).

http://www.tax.virginia.gov/web_pdfs/taxtable.pdf

If you have voluntary contributions to pension plans, that will be deducted from you salary and your reported income will be lower.

Those calculations are about as good of an estimate that you can get without going into the details of US taxation. There is no real way to completely estimate the final tax bill because there as so many different deductions and credits depending on your personal situation.
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Old Apr 13th 2011, 8:56 am
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Default Re: Taxes taxes taxes???

Originally Posted by Michael View Post
The federal income tax calculator should give you a fairly accurate estimate. Use married filing jointly, check personal exemption, spouse exemption, dependents = 2, and dependents qualifying for tax credit = 2. Put your income under wages, salaries, tips, etc. That should give you the maximum taxes owed unless you have unearned income. If you have unearned income that is long term capital gains add 15% of that income to the taxes owed. If it is short term capital gains or interest, just add that to your income.

You won't get the child care tax credit since your wife won't be working. It is unlikely that you will be able to to itemize deductions since you would need deductions in excess of the standard deduction of $11,400.

AMT probably won't enter in to your situation so don't worry about that.

You should be able to calculate FICA yourself.

The following is the Virginia marginal tax rates. Use the taxable income (income after deductions) displayed on the previous federal income tax calculator that you used to determine the amount of taxes you owe in Virginia.

Example: Using the previous calculator with $100,000 of income with filing jointly, with exemptions checked for yourself and wife, 2 dependents, and 2 children eligible for child tax credits, the calculator will indicate $73,600 in taxable income. The Virginia tax on that will be $720 + (($73,600 - $17,000) * 0.0575).

http://www.tax.virginia.gov/web_pdfs/taxtable.pdf

If you have voluntary contributions to pension plans, that will be deducted from you salary and your reported income will be lower.

Those calculations are about as good of an estimate that you can get without going into the details of US taxation. There is no real way to completely estimate the final tax bill because there as so many different deductions and credits depending on your personal situation.
Michael you are exceptional!

With the minimum I hope to earn, federal + state tax appears around 10% rate. I haven't taken into account pre-tax pension and health care deductions, which would drive the rate a bit lower still if I understand correctly.
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Old Apr 13th 2011, 9:48 am
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Default Re: Taxes taxes taxes???

Originally Posted by Fabian23 View Post
Michael you are exceptional!

With the minimum I hope to earn, federal + state tax appears around 10% rate. I haven't taken into account pre-tax pension and health care deductions, which would drive the rate a bit lower still if I understand correctly.
If you look at the bottom of the calculator, you will notice which tax bracket you are currently in. Also if you scroll down below the calculator, you will see the marginal tax rate table. If your marginal tax bracket is 25% (meaning your top portion of you income is taxed at 25%) that means that any income added or subtracted from your estimated income will be taxed at that rate unless you move into another marginal tax bracket. The table indicates the tax rates on your taxable income. So if you were in the 25% tax bracket, each dollar of extra income will have $0.25 tax and each dollar that your income is reduced will save $0.25. So if you look at the marginal tax table, a part of your taxable income may be taxed at 10%, 15%, and 25%. Use the numbers under married filing jointly to determine how much of your taxable income is taxed at each rate.

Your share of medical premiums will not be able to be deducted (companies premiums plus any other benefit paid by the company will not show up as income to you) since it is one of the deductions in combination with other deductions that must exceed the standard deduction ($11,400). Also medical has a certain amount that can't be used as a deduction until it exceeds a certain percentage of your income. Pension contributions by both you and the company are not taxable and your year end W2 form that reports your income will not be shown as taxable income.

Your first year taxes will be complicated. You may possibly be filing as a non-resident or resident. If filing as a non-resident, you declare only your US income for that year but you don't get all the exemptions and deductions. However, since your income is only for a partial year, you will likely pay very little tax. If you file as a resident based on the substantial presence test (or elect to be taxed as a resident), you must claim your foreign income on your US taxes but you get to take tax credits for foreign taxes paid to reduce taxes owed. Sometimes one way works out better than the other way.

http://www.irs.gov/businesses/small/...=96352,00.html

Last edited by Michael; Apr 13th 2011 at 10:06 am.
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