Welcome to City-Data.com Forum!
U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Economics > Personal Finance
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 03-08-2017, 02:57 PM
 
Location: NC
940 posts, read 962,065 times
Reputation: 1241

Advertisements

Quote:
Originally Posted by TheOverdog View Post
401k and healthcare deductions lower your actual taxes and even if they don't because you get nailed by the AMT, they are not even taxes. They are savings and should be counted as part of your savings you do each year.
I never said they weren't savings. I said after all deductions we only get paid about half of our salaries.

$200k/yr = ~$16,600/month

Hitting our bank account: ~$8,400

You can't pay a mortgage or credit card bill with 401k "savings". All that matters is what hits your bank account. And even then we have to pay additional taxes.
Reply With Quote Quick reply to this message

 
Old 03-08-2017, 02:58 PM
 
Location: NC
940 posts, read 962,065 times
Reputation: 1241
Quote:
Originally Posted by Lowexpectations View Post
Well deductions including 401k is a terrible way at looking at your net pay in your bank account because they are afterall savings. My fed tax rate is in the low teens, FICA is under 7.65% so my tax bill is right around 20%
I paid 1.47% federal income tax my first year out of college. I'd much rather pay my higher rate now, because I make a lot more money.
Reply With Quote Quick reply to this message
 
Old 03-08-2017, 03:06 PM
 
26,145 posts, read 21,357,522 times
Reputation: 22706
Quote:
Originally Posted by pipsters View Post
I paid 1.47% federal income tax my first year out of college. I'd much rather pay my higher rate now, because I make a lot more money.
Well my income is over 200k and even still my fed/FICA rate is right around 20%
Reply With Quote Quick reply to this message
 
Old 03-08-2017, 03:07 PM
 
26,145 posts, read 21,357,522 times
Reputation: 22706
Quote:
Originally Posted by pipsters View Post
I never said they weren't savings. I said after all deductions we only get paid about half of our salaries.

$200k/yr = ~$16,600/month

Hitting our bank account: ~$8,400

You can't pay a mortgage or credit card bill with 401k "savings". All that matters is what hits your bank account. And even then we have to pay additional taxes.
But you could with relative ease stop the 401k contributions if you needed higher cashflow to pay your mortgage
Reply With Quote Quick reply to this message
 
Old 03-08-2017, 03:38 PM
 
Location: NC
940 posts, read 962,065 times
Reputation: 1241
Quote:
Originally Posted by Lowexpectations View Post
Well my income is over 200k and even still my fed/FICA rate is right around 20%
People always say they pay such low taxes but I just don't see it on my end. Unless you have a lot of deductions or kids. When asked they never actually disclose anything they do. Which I fund "funny".

On my income alone, looking at my end of year W2

Total taxes - federal, state, SS, medicare: $37k
Total income (gross) - $126k, ~30% tax rate, but keep going

After 401k (pretax deduction not Roth) - $108k gross - actual 34% tax rate
----------------------------

And that is just what was deducted, not what we have to pay extra
Reply With Quote Quick reply to this message
 
Old 03-08-2017, 04:03 PM
 
26,145 posts, read 21,357,522 times
Reputation: 22706
Quote:
Originally Posted by pipsters View Post
People always say they pay such low taxes but I just don't see it on my end. Unless you have a lot of deductions or kids. When asked they never actually disclose anything they do. Which I fund "funny".

On my income alone, looking at my end of year W2

Total taxes - federal, state, SS, medicare: $37k
Total income (gross) - $126k, ~30% tax rate, but keep going

After 401k (pretax deduction not Roth) - $108k gross - actual 34% tax rate
----------------------------

And that is just what was deducted, not what we have to pay extra

200k in income max 2 401ks and take the standard deduction married filling jointly

Effective fed rate = 13.6%
FICA rate = 7.65%
Reply With Quote Quick reply to this message
 
Old 03-08-2017, 05:22 PM
 
Location: NC
940 posts, read 962,065 times
Reputation: 1241
I'm gonna have to get TurboTax spooled up later but using the 1040 worksheet at the end of the tax tables

Wages $216k
Short term gains $20k
- $25k in 401k deductions

$211k x .28% - $13k = $46k in federal taxes (does that include FICA and medicare?)

Ignoring long term cap gains sales that I can't figure out now

$46k/$211k = ~21%, is that correct?
Reply With Quote Quick reply to this message
 
Old 03-08-2017, 06:31 PM
 
26,145 posts, read 21,357,522 times
Reputation: 22706
Quote:
Originally Posted by pipsters View Post
I'm gonna have to get TurboTax spooled up later but using the 1040 worksheet at the end of the tax tables

Wages $216k
Short term gains $20k
- $25k in 401k deductions

$211k x .28% - $13k = $46k in federal taxes (does that include FICA and medicare?)

Ignoring long term cap gains sales that I can't figure out now

$46k/$211k = ~21%, is that correct?
I'm not sure what your numbers are. It's not including FICA though. At 216k gross, 25k in 401k, standard dedudcution you'd be in the teens in effective federal income tax rate ignoring cap gains
Reply With Quote Quick reply to this message
 
Old 03-08-2017, 08:51 PM
 
5,342 posts, read 6,131,576 times
Reputation: 4719
Quote:
Originally Posted by pipsters View Post
I'm gonna have to get TurboTax spooled up later but using the 1040 worksheet at the end of the tax tables

Wages $216k
Short term gains $20k
- $25k in 401k deductions

$211k x .28% - $13k = $46k in federal taxes (does that include FICA and medicare?)

Ignoring long term cap gains sales that I can't figure out now

$46k/$211k = ~21%, is that correct?
Why are you calculating taxes like that? You only pay 28% on the portion of your income in that bracket. P,us your deductions come out before you calculate and you y are forgetting the personal exemptions.

$236-25-12.6-8..1

That would be a tax of $40.27k assuming no kids.

That's a federal rate of ~ 17%
Reply With Quote Quick reply to this message
 
Old 03-08-2017, 09:21 PM
 
Location: NC
940 posts, read 962,065 times
Reputation: 1241
Quote:
Originally Posted by mizzourah2006 View Post
Why are you calculating taxes like that? You only pay 28% on the portion of your income in that bracket. P,us your deductions come out before you calculate and you y are forgetting the personal exemptions.

$236-25-12.6-8..1

That would be a tax of $40.27k assuming no kids.

That's a federal rate of ~ 17%
Yes I know how the marginal rate works. To be fair I'm not quite sure how the deductions/exemptions work, I know they are there but never understood exemptions in addition to standard deduction with no kids. Ridiculously complicated, and getting more so every year (here's to the flat $30k deduction Trump wants!!).

Form 1040 instructions instructs you to figure out your taxes like that.



I was just trying to get an idea. It's unfortunate there isn't a flat rate that covers all federal taxes you pay. Because in addition to paying Federal income tax you also pay SS and Medicare, which is pretty significant. It needs to be all combined. People need to see in one spot how much money is going to the Feds.

Anyway I did download Turbotax and put our info in it. Had we not had any short or long term cap gains or dividends we'd have gotten a refund, which would be the first time in about 8 years. Pretty excited about that. Because we overpaid and I withheld a good chunk from a stock sale for taxes we'll actually end up owing less money than I thought. Awesome news. At least we are finally at the point where we are getting a refund in taxes, I am ecstatic about that.
Attached Thumbnails
how much money you should have saved -   CNBC report-tax.jpg  
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:


Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Economics > Personal Finance

All times are GMT -6.

© 2005-2024, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Contact Us - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37 - Top