Calculating income after taxes - how?

[KingNothing]

Hello all! I am in a position where I am likely to be making quite a bit more money in the next year or two than I have previously. I would like to plan my finances around this and estimate me income after taxes.

Is there an online calculator I can use to calculate such a thing? How can I figure this out ahead of time?

 

[BobG]

This will help you with your federal: http://www.irs.gov/individuals/page/0,,id=14806,00.html

You should also try to figure out your state, as well.

If you only have one source of income (your job), then simply declaring the proper number of dependents on your W-4 should be sufficient. Otherwise, it's good idea to estimate what your federal and state income taxes will be and then check to make sure you're having enough deducted each pay period (or paying enough in estimated taxes each quarter) that it comes close to what you'll owe at the end of the year.

 

[Evo]

If you are in the US, don't forget social security and medicare.

 

[russ_watters]

Its actually pretty easy: if you're in the $37-$80k bracket your marginal rate is 30% and the fica+med is 5.6%. Then add any flat state or local taxes and your 401k. Typical total would be around 45%.

 

[Alfi]

I only use the simplified tax form:

1. How much did you make?
2. Send it to us. Many or any tax calculating software should work.
Just input your numbers and ...

 

[AlephZero]

It you need to work out exactly what your income after tax is, then it's too small.

 

[mege]

Its actually pretty easy: if you're in the $37-$80k bracket your marginal rate is 30% and the fica+med is 5.6%. Then add any flat state or local taxes and your 401k. Typical total would be around 45%.

Yes, definitely don't forget your other paycheck withholdings/payments (Insurance, 401k, Stock Purchase etc).

Unless you're extremely tight to start, you may be better off just seeing what your first pay check comes out to and extrapolate. That will likely be a bit more accurate than taking into account all of the little taxes, fees, etc at the appropriate rate.

eg: if you're clearing $1500 in your first check and you get paid twice a month, you would have $36k for the year in pocket.

If you do choose to computer your taxes, remember that the rate is marginal. Single tax rate for $34,001 – $82,400 is 25%. But... $8,376 – $34,000 is 15% and less is 10%. You'll also have a standard deduction of about 10k off the top, so your tax-liable income is probably 10k less than your yearly salary.
Presuming you fall into the bracket above you're really looking at:
8375*.10 + (34000-8375)*.15 + ([your income minus ~$10k std deduction] - 34000)*.25

So your real income tax rate at $34,002 is still in the low teens (just $2 are taxed at 25%, and the 8375 is at 10%).

http://en.wikipedia.org/wiki/US_Income_tax#Year_2010_income_brackets_and_tax_rates

 

[russ_watters]

Yes, definitely don't forget your other paycheck withholdings/payments (Insurance, 401k, Stock Purchase etc).

I didn't mention insurance because it tends to be a fixed amount, not a percentage.

Unless you're extremely tight to start, you may be better off just seeing what your first pay check comes out to and extrapolate. That will likely be a bit more accurate than taking into account all of the little taxes, fees, etc at the appropriate rate.

What I do since I get paid by the hour is calculate a marginal pay rate from two paychecks. Ie, if the takehome on one is $1000 for 40 hours and the takehome is $1040 for 42 hours, the marginal rate is (1040-1000)/(42-40)=$20/hr.

That's useful for figuring out how much more or less I'm going to get based on my overtime for a certain pay period.