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Understanding Tax and other outgoings - Texas

Understanding Tax and other outgoings - Texas

Old Jan 29th 2012, 10:02 pm
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Default Re: Understanding Tax and other outgoings - Texas

Thank you Bob, all of your posts have been really helpful

Have posted on CityData and already had a couple of people reply that we would be comfortably off on that amount - but I am dubious!

We have twin daughters aged 16 who would probably be near college age if/when we arrive in the US so will be looking at college fees x 2 the minute we arrive. Sons aged 12 and 10 currently so estimating 14 and 12 when we arrive.

Another poster on a different thread has said to do 2 years in state community college first then last 2 years at Uni.

The next time someone in the UK whinges about Uni Fees I will be letting them know just how lucky they are compared to parents across the pond

Jobs appear to be in either California or Texas. Gradually starting to think that Texas would be better option as cost of living too high in Cali.

Right now we are just trying to work out if we could afford to live on $150,000 per year given the fact we are a large family with college fees to pay.
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Old Jan 29th 2012, 10:42 pm
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Default Re: Understanding Tax and other outgoings - Texas

Originally Posted by clarity1971 View Post
Right now we are just trying to work out if we could afford to live on $150,000 per year given the fact we are a large family with college fees to pay.
Well the advantage of coming over on greencards would be the kids able to work while at college compared to if you came over on either H1/L1 visa's.

Another option would be for the eldest pair to stay in the UK for college, need 3 years residence in the UK to get local rates, which admittedly isn't a big difference with the new fees, but would make them eligible for the SLC for student loans and the big difference of not ha.ving to pay up front costs compared to international students.

Just something to consider, and kids going home to study is a valid reason for not abandoning US residency as long as they apply for the re-entry permit first
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Old Jan 30th 2012, 12:31 am
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Default Re: Understanding Tax and other outgoings - Texas

Originally Posted by clarity1971 View Post
Lisa, we would love to hear your thoughts on best Middle and High schools in the area? Not sure how old your children are?
Well it depends on where you're thinking of living. We live about 20 mins west of Fort Worth. There's a saying here that people can tell you're from Texas because you judge distances in how long it takes to drive there!
If you're thinking of heading to Fort Worth I can help you out.
There's a pretty good web site www.greatschools.net I think it is...take a look
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Old Jan 30th 2012, 6:19 am
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Default Re: Understanding Tax and other outgoings - Texas

Originally Posted by clarity1971 View Post
...

Jobs appear to be in either California or Texas. Gradually starting to think that Texas would be better option as cost of living too high in Cali.

Right now we are just trying to work out if we could afford to live on $150,000 per year given the fact we are a large family with college fees to pay.
Are you fairly confident that you would be getting the same income in both CA and TX? Typically, salaries are significantly higher in CA, influenced by the higher cost of living. salary.com will give you some idea of differing levels.

My observations are that you get a good deal more $ in CA, but not enough to offset the higher cost of living (which really means, cost of housing). Also, not everything in CA is more expensive; assuming you are looking at coastal regions (eg, Bay Area), you can look forward to almost no a/c costs in the summer and only moderate heating in the winter. You would typically need a much smaller house in the Bay Area because the weather encourages you to go out more. In TX, you will form a very strong bond with your A/C!

'Quality' of living is also a big factor in CA - very outdoor-oriented lifestyle (the weather is extremely accommodating most of the year), and an awful lot to do and see - drive to Tahoe for skiing, visit Yosemite, drive down to LA for disneyland, drive along the coast highway (highway 1), pop up to the giant redwood forests, hike Mt. Tamalpais, enjoy a vast diversity of food (the Asian food is unbeatable), live in a multi-racial, liberal atmosphere, etc etc ... (which may not be your cup of tea, of course, but it is very different from Texas!).

But if the money on offer is really the same for both, you will be relatively rich in TX, poor in CA.
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Old Jan 30th 2012, 3:58 pm
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Default Re: Understanding Tax and other outgoings - Texas

Originally Posted by Steerpike View Post
Are you fairly confident that you would be getting the same income in both CA and TX? Typically, salaries are significantly higher in CA, influenced by the higher cost of living. salary.com will give you some idea of differing levels.
glassdoor.com is another good site for the salary and company info.
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Old Feb 3rd 2012, 5:38 pm
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Default Re: Understanding Tax and other outgoings - Texas

I would think so but you'll have to manage your funds well. Honestly it depends if it is long or short term. If you buy, you'll have a lot less spending money as the property tax is high (well in Houston it is - I'm not positive about Plato).
As a comparison:
I'm married, with a 4 month old and support both of my wife and son.
I earn towards the lower end of what you're talking about as a salary ($130k).
We own our house (4 bed detatched although in UK it would be classified as 5/6 bed due to game & media rooms).
We live comfortably but we don't have a massive amount of money throw around.
My healthcare is covered by my employer but my family's is not (circa $300/month).
Electricity ime runs $100/month (winter) to $350-400 in summer. Water can peak at $300/month (we have a 16k sqft lot which takes a fair amount of watering)
We drive modest cars (Hyundai's)
After standing bills (house, cars, insurance, student loan, utilities, health insurance) we have about $3.5k/month to include all food, entertaining, saving.

Hope that helps a little. Everyone's perception on quality of life and spending money required will vary. Like I said, we have no complaints about our quality of life but we also can't throw money around.
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Old Feb 3rd 2012, 8:03 pm
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Default Re: Understanding Tax and other outgoings - Texas

Oh, and as an idea of income tax, my effective rate in Houston on $130k is somewhere around 18% (roll on submission of tax returns and refund from the IRS!!) even though I'm in the 25% bracket for married filing joint.
I'll just clarify that though as thats 18% on my taxable income (i.e. I've taken deductions for my wife and child as dependents and other allowable deductions for interest on mortgage etc). If you take my entire income and calculate tax as a percentage it's about 14.5%. YMMV though...
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Old Feb 4th 2012, 6:43 pm
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Default Re: Understanding Tax and other outgoings - Texas

Originally Posted by Bink View Post
...
My healthcare is covered by my employer but my family's is not (circa $300/month).
...
I am going to guess here that what you mean is, your entire family is covered (as in, insured against events) by your employer-provided plan, but the cost of the family portion is not fully subsidized and thus you pay $300/month towards that.

This is quite typical. My company is (was ...) very small and did not have access to competitive plans, and thus could not offer good rates on family coverage. The average employee with family ended up having to pay $1,000 / month, vs. a single person getting full subsidy. Now that we've grown, we re-negotiated some deals and are able to offer better family coverage for only about $500/month.
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Old Feb 5th 2012, 1:17 am
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Default Re: Understanding Tax and other outgoings - Texas

Originally Posted by Steerpike View Post
I am going to guess here that what you mean is, your entire family is covered (as in, insured against events) by your employer-provided plan, but the cost of the family portion is not fully subsidized and thus you pay $300/month towards that.

This is quite typical. My company is (was ...) very small and did not have access to competitive plans, and thus could not offer good rates on family coverage. The average employee with family ended up having to pay $1,000 / month, vs. a single person getting full subsidy. Now that we've grown, we re-negotiated some deals and are able to offer better family coverage for only about $500/month.
Yes, sorry I should have clarified it. You are correct, my healthcare is fully subsidized but the additional amount I pay covers my family on my plan. We're incredibly fortunate in that although we're only a small company, we have investment from a big company and get access to their healthcare plan which is considerably better than what we would otherwise get.
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Old Feb 6th 2012, 10:54 pm
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Default Re: Understanding Tax and other outgoings - Texas

One thing I'd mention is that if you have over $10,000 equivalent in money outside the United States (ie Bank/building society accounts in England), you need to file form TD F 90-22.1 and indicate how much money you have in
each account. This isn't part of your tax return but needs to be mailed by the 30th june each year to the treasury department. The penalties can be severe for not filing. Google search FBAR and look here:

http://www.irs.gov/businesses/small/...148849,00.html
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Old Feb 7th 2012, 2:10 pm
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Default Re: Understanding Tax and other outgoings - Texas

Originally Posted by Tony67 View Post
One thing I'd mention is that if you have over $10,000 equivalent in money outside the United States (ie Bank/building society accounts in England), you need to file form TD F 90-22.1 and indicate how much money you have in
each account. This isn't part of your tax return but needs to be mailed by the 30th june each year to the treasury department. The penalties can be severe for not filing. Google search FBAR and look here:

http://www.irs.gov/businesses/small/...148849,00.html
+100000000000000000000000000
I've fallen foul of this and was fined by the IRS. Heed this warning! They don't care if you don't know about it. It is only a reporting requirement - it's unlikely to create any additional tax unless you're doing something illegal in which case you have bigger problems...
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Old Feb 7th 2012, 9:07 pm
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Default Re: Understanding Tax and other outgoings - Texas

Originally Posted by Bink View Post
Water can peak at $300/month (we have a 16k sqft lot which takes a fair amount of watering)
300 bucks - wow - thats steep! What you doing - bathing in it? Oh, wait......

We're out in Katy with a little bit larger lot (a touch over 20K) and the highest we paid in the last year was $83 for 36000 gals and I thought that was bad! have you got expensive water, or are you just using a hell of a lot of it? Are you sure you haven't got a leak somewhere?
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Old Feb 8th 2012, 11:11 pm
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Default Re: Understanding Tax and other outgoings - Texas

Health Care for 6 of us? Lets assume worse case scenario! I pay $83 per paycheck before taxes, which is 26 times per year, for health insurance for a family, which for me includes spouse and all children. That gets me very good coverage (in comparison to other plans) on medical, prescriptions, vision care and dental. ON top of that I pay about $200-$300 per year on co-payments for doctor visits and prescriptions etc

Tax deductions - (we have 4 children if this makes a difference?)children under 17 get you a $2000 tax credit per year, i.e. if the tax table said you owed $10000, each child would qualify you to get $2000 tax back

Car rental and Insurance for 2 cars?cars can be rented for as little $30 per day, but with 4 kids you'll be needing something bigger, so maybe 50-100 a day. look at companies called Enterprise, Alamo, National, Budget. Hertz and Avis are usually too exp.

Car insurance will be about $100 per month for 2 cars, but as a new arrival with no driving record it'' be higher for a while. Have proof of your driving record from UK


Electricty? - expecting to be high in Texas due to A/C$240 per month

Cable TV?don't get cable, get Directv 60-100 per month

Mobile phone contracts for all 6 of us? $180 per month on T-mobile gets 3 smartphones with unlimited data and text, and 700 shared talk minutes

Home Insurance? $500 per year but that's Arizona - no natural disasters like floods or tornados.
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Old Feb 8th 2012, 11:25 pm
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Default Re: Understanding Tax and other outgoings - Texas

Originally Posted by 00derek View Post
Mobile phone contracts for all 6 of us? $180 per month on T-mobile gets 3 smartphones with unlimited data and text, and 700 shared talk minutes
We purchased 3 new smartphones on a family plan with TMobile in Nov 2011. We got unlimited data and text on all 3, and 2,000 shared talk minutes! $180 plus taxes and fees.

Rene
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Old Feb 9th 2012, 7:07 am
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Default Re: Understanding Tax and other outgoings - Texas

Originally Posted by Bink View Post
+100000000000000000000000000
I've fallen foul of this and was fined by the IRS. Heed this warning! They don't care if you don't know about it. It is only a reporting requirement - it's unlikely to create any additional tax unless you're doing something illegal in which case you have bigger problems...
Surely it will generate additional tax, since there will be interest or dividend payments on such money, which will count as income? Not worth worrying about from a financial perspective, but a big fat pain to have to report - probably some obscure form that one has no idea how to fill out, etc ...

I use the analogy of 'foreign tax credit'; some mutual funds I own invest a small amount in foreign countries, and pay a small amount of foreign tax. I'm allowed to take credit for that tax. The whole thing ends up saving me about $5 each year but takes me HOURS of research to find the right info to pop into the form.
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