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Old 02-11-2008, 01:59 PM
 
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Say you were earning 100,000 US$ per year, living in Houston, how much would be taken from that in income taxes.

Sounds like a pretty dumb question I guess but just to give you some idea in my current country of residence the answer would be half ie 50,000 US$.

I'm hoping it's a lot less over in the land of the free.
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Old 02-11-2008, 04:02 PM
 
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For federal taxes, you are taxed by margin. (each tier or "bracket" of income is taxed at an increased rate).

So the first $15,000 is taxed at a lower rate than the last $15,000 or so (I haven't looked at the brackets or rates this year yet). Here you are for reference: Rate schedule (federal income tax - Wikipedia, the free encyclopedia)

I would say the average rate you would pay would come to about 30-35% or so. There are of course a ton of other factors. Are you married? Have kids? Own a house with interest expense?

All of these would get you "deductions" that would lower the amount of your income that would be taxed.

One good thing about Houston (and Texas in general) is that we are one of the states without State income tax, so that would not figure into your calculation.

EDIT: Did a quick and dirty estimate on $100,000 of income. You'd owe $22,100 on the full $100,000 if single. That is before ANY deductions or exemptions.

Also note, for tax reasons "head of household" is basically "Single Parent"

Also, the standard deduction for single this year is $5,350 PLUS the personal exemption of $3,400. So your taxable income if single and taking the standard would be $91,250. So your taxes owed would be $19,660. Note that these calculations are for single with the standard deduction. If you owned a house and had charitable contributions, etc, you could possibly have a larger itemized deduction. If you are married, your burden would be lower as well as you get more deductions and exemptions (see other tables).

Now then, please note that living in Houston, you will pay approx. 7.5% to 8.25% on all purchases in sales tax, as well as 2.5% to 3.5% in property tax if you own a home.

Also, if you are a newbie to the US tax code and are paying taxes for the first time, I recommend you use a tax prep service or at least buy one of the home computer tax software packages available. They'll make sure you get all the things owed to you.

So, if you owned a $200,000 home, you'd owe about $6,000 in property taxes.
If you spent $60,000 or so in a year on taxable purchases, you'd pay about $4,500 in sales tax.
Add the approx. $20,000 you are paying in federal income taxes, you'd be paying TOTAL: about $30,500 or so in taxes a year....so about my original 30% estimate at that income.

Note, the more money you make, the more percentage you are taxed on the higher margins, and if you own a more valuable house, you pay more there too.

Last edited by Supermac34; 02-11-2008 at 04:17 PM..
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Old 02-11-2008, 04:07 PM
 
912 posts, read 2,334,455 times
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Quote:
Originally Posted by Supermac34 View Post
For federal taxes, you are taxed by margin. (each tier or "bracket" of income is taxed at an increased rate).

So the first $15,000 is taxed at a lower rate than the last $15,000 or so (I haven't looked at the brackets or rates this year yet). Here you are for reference: Rate schedule (federal income tax - Wikipedia, the free encyclopedia)

I would say the average rate you would pay would come to about 30-35% or so. There are of course a ton of other factors. Are you married? Have kids? Own a house with interest expense?

All of these would get you "deductions" that would lower the amount of your income that would be taxed.

One good thing about Houston (and Texas in general) is that we are one of the states without State income tax, so that would not figure into your calculation.
Thank you very much, I have no deductions other than a non-earning spouse and will be renting a property. 30% is an improvement on 50 but still not as low as I'd hoped. Seems like I'll be asking for a salary increase before I arrive.
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Old 02-11-2008, 04:23 PM
 
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Updated post with more details

Ah, you are married:

Here's the dirty numbers:

100,000 - 10,700 (married/jointly deduction) - 6,800 (personal exemption X 2) = $82,500 taxable income.

Following the chart, that's 8,772.50 for the first 63,700 + 9,075 (25% of rest of 100K).

TOTAL federal owed = $17,847.50 owed for federal taxes.
NO property tax.
Still about $4,500 sales tax during the year.

So about 22K or so. 22% isn't bad.
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Old 02-11-2008, 10:00 PM
 
Location: Houston, TX (Bellaire)
4,815 posts, read 11,983,865 times
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Don't forget FICA/Medicare tax which is 7.65% if your a wage slave or 15.3% if your self-employed. I assume your W-2 so add around 6300 to the 22k previous tax for 28k. If you buy a typical home at 3 times wages (300k) then your looking at another 9k probably a year in property tax, but the interest is tax deductible and would possible drop your income tax total. Well call it 6k to cover the difference.

Total yearly taxes would then be 34k on 100k income.
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Old 02-11-2008, 10:20 PM
 
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Since TX does not have a state income tax withdrawal from paychecks I am going to shoot this over to the proper forum for additional feedback...
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