Uk v US income tax
Sep 18th 2011, 2:00 pm
#1
Forum Regular
Thread Starter
Joined: Nov 2010
Location: USA
Posts: 167
Uk v US income tax
Hi,
Am trying to work out the difference in income tax. For example some one earning £25,000 in UK would pay how much national insurance and income tax monthly?
In US this is approx. $40,000, what would the tax be on this, does it depend on what state living? If so say, North Carolina.
Also, What would a self employed person paying themselves $40,000, pay in US taxes
Thanks!
Am trying to work out the difference in income tax. For example some one earning £25,000 in UK would pay how much national insurance and income tax monthly?
In US this is approx. $40,000, what would the tax be on this, does it depend on what state living? If so say, North Carolina.
Also, What would a self employed person paying themselves $40,000, pay in US taxes
Thanks!
Sep 18th 2011, 4:21 pm
#2
BE Site Lead
Joined: Aug 2004
Location: MA, USA
Posts: 92,170
Re: Uk v US income tax
In the UK, you can find that out easily enough via the inland revenue.
In the US, IRS for Federal, but then you've got state taxes and in some states, county/city taxes.
You can look your state up.
If you are self employed, you've also got to pay the portion of tax that the employer usually pays, so you're doubling your tax burden on a few bits and pieces.
Also need to factor in your medical insurance costs, it isn't a tax, but being self employed probably means it will be a lot more expensive than one getting a employer based cover, but this will reduce your taxable salary and you might as well consider this a tax.
In the US, IRS for Federal, but then you've got state taxes and in some states, county/city taxes.
You can look your state up.
If you are self employed, you've also got to pay the portion of tax that the employer usually pays, so you're doubling your tax burden on a few bits and pieces.
Also need to factor in your medical insurance costs, it isn't a tax, but being self employed probably means it will be a lot more expensive than one getting a employer based cover, but this will reduce your taxable salary and you might as well consider this a tax.
Sep 18th 2011, 5:05 pm
#3
Deep in the woods of CT
Joined: Feb 2010
Posts: 7,002
Re: Uk v US income tax
Just how will you be self-employed? When you say "pay themselves" it sounds as if you are planning to set up -- say -- an s-corp and then make yourself an employee and pay yourself through the entity. Otherwise, being self-employed can entail working as an independent contractor, getting your fee with no deductions taken out from the client, paying your own estimated taxes four times during the year, and getting a 1099 from the client at year end. That way you are personally liable for all the FICA and medicare taxes, which are otherwise split with the employer. Of course, if you have the s-corp, there are also corporation taxes to be filed, and you will have to take out your federal/state/city/ etc before you "pay yourself," but you may also be able to work your health insurance through the corporation.
Sep 19th 2011, 9:55 pm
#4
Lost in BE Cyberspace
Joined: Oct 2003
Location: Avon Lake, OH
Posts: 5,270
Re: Uk v US income tax
For the US, roughly, assuming single and without working in any of the things that will lower that cost. $5,500 in federal tax, $2,600 in state tax, city tax ?, $5,320 in social security and medicare. Health insurance 100% out of pocket I would figure at $12,000 and hope you can get cheaper. Maybe 50-60% of the $40,000 at a worst case outlook.
