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Obviously paystub 2 will pay a lot more in taxes. However, why does federal income tax go up so much more? For example, social security/medicare tax for paystub #2 is about 1.7x (less than double) more than paystub #1. However, federal income tax is about 2.9x (almost triple) more for paystub #2 than #1. Is this normal?
//EDIT: I am 100% aware of the tax bracket, but it's Jan 2017, the year just started, the bracket calculation should be reset. Even if the bracket didn't reset, the 3x jump is ridic
Obviously paystub 2 will pay a lot more in taxes. However, why does federal income tax go up so much more? For example, social security/medicare tax for paystub #2 is about 1.7x (less than double) more than paystub #1. However, federal income tax is about 2.9x (almost triple) more for paystub #2 than #1. Is this normal?
yes; Social Security tax is only on first 80,000? of income, then -0-
FIT the percentage INCREASES the more you make .... no limit. Paystub #2 = 'you're rich', so now you get to pay your 'fair share', heh heh heh
//EDIT: I am 100% aware of the tax bracket, but it's Jan 2017, the year just started, the bracket calculation should be reset. Even if the bracket didn't reset, the 3x jump is ridic
I'm not sure if I'm following your rationale here. It sounds like you believe that in a new year, you reset to the lower bracket then the bracket raises as your cumulative gross increases?
If that's what you're saying, then no, it doesn't "reset". If the payroll is monthly, the bracket on paystub #1 is based on a gross of $$60K/year. The bracket on paystub #2 is based on $120K/year.
Also, I forgot to add that if either of the checks is what is considered a supplemental (bonus) check it's a different withholding schedule. Last year I think FWT was 25% on supplemental. I'm not sure what it is this year.
We have a progressive income tax. If you don't normally make the higher amount or if the #2 check is a supplemental, you will get the difference back at tax time. This is just the withholding, it could be too much, too little or right on the money.
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