Tax deductions on the paycheck

[Nich-Nick 3,353]

Well if it's true I could get a tax refund due to be payed fortnightly, then I won't be so pissed off.

I don't see why I should pay extra tax because I'm getting paid fortnightly instead of weekly. Sure it's a higher check, but it's based on 2 weeks work and should not be considered for extra tax.

You aren't paying more tax. It's like they are putting it aside for you so you don't have to pay it all at tax filing time. Now maybe you're complaining that they are holding too much back, but they aren't taxing you more. If you always get paid every two weeks, then it's calculated on a two week check. That one week of pay was probably also based on a two week pay period, so it looked like you were not earning much for two weeks work. That was actually not holding out enough. It's like a little bonus for you. If you want less to come out of your check, then your W4 form has to be changed. It's a form you fill out when you start work. If you have yourself, a wife, and 2 kids, then you get 4 allowances. A single guy would get 1. More comes out of the check with 1 allowance. Not because they're charging you more tax, but because when you file a return, you get extra deductions for all the kids and dependents. Well it's kinda like they are charging the single guy more because he doesn't have a houseful he's supporting, so he won't get extra deductions to take off his tax bill at filing time.

One thing to be careful of. If the wife works and claims herself and the husband on the W4, and the husband claims himself and the wife on his W4, they are basically 2 people but having withholding done for 4. They will get larger checks, but when tax filing time comes they can only have 2 deductions and may have not paid in enough money and will owe the IRS. If you're okay with coming up with money to pay in a lump sum at the end, then do it. You pay now, you pay later...you have some flexibility, but if you owe too much at the end, they will slap on a penalty for underpayment. Once you do your first tax return, then it may make more sense how it works. Try TurboTax. The good news is, even if you were only married one day in 2008 or had a child for just a day of 2008, you get to claim them for the whole year and get the full deductions to lower your tax bill. But the bad news is, two salaries lumped together will tend to put you in a higher income bracket.

Taxes suck, but how else are we going to pay for schools, highways, military, support for unemployed and disabled, free breakfast and lunch for poor kids, food stamps, medical care and schooling for 12 million illegal immigrants who may not pay taxes for fear of being caught, etc. The working people have to foot the bill. That's a broad and over simplified statement, but has a lot of truth to it.

[Mononoke28 134]

Well if it's true I could get a tax refund due to be payed fortnightly, then I won't be so pissed off.

I don't see why I should pay extra tax because I'm getting paid fortnightly instead of weekly. Sure it's a higher check, but it's based on 2 weeks work and should not be considered for extra tax.

I get taxed 23%, so I would take 21% any time, any day. And just think, if the government keeps screwing up the eay it has all that money they took out for Social Security for your retirement, may not be there when you retire. So you gave it all up for nothing.

Here's an interesting point of view regarding tax returns:

Popular Stupid Tax Strategies

A Suze Orman exclusive

Refunds Are a Sign You Have Screwed Up

Tax refunds are not gifts. It is literally a refund of money you paid. More to the point: it’s a refund of money you overpaid. You’re excited about getting a refund when in reality you’re simply getting money back from Uncle Sam that you needlessly forked over. You gave Uncle Sam an interest free loan. I don’t think you would give your own uncle an interest-free loan, so why are you giving it to Uncle Sam? And don’t tell me it’s your way of saving money. I know about your type. You get the refund check and instead of investing it, you spend it as if it’s funny money. Come on guys, let’s get a grip. If you receive a refund you need to either contact your employer’s payroll department and increase your withholding (so less is taken out of each paycheck for taxes) or if you’re self-employed, adjust your quarterly estimated tax payments. And if you think that cannot make a difference I am here to tell you it can. The average refund is $3,000. What if you took that $3,000 or $250 a month and used that money to fund your Roth IRA each month? As I showed you above, that adds up to serious money over time. Now that is what is called retirement planning, not just tax tips.

Diana

[himher 634]

Stop crying. They take 27% of mine. I'd pay 21% anytime, any day. Welcome to America, where 10% of the people pay 80% of the taxes, and where 50% of the people pay 3% of the taxes.

Good god!.. 21% that can't be right.. can it?.. actually I is.. I counted up my own cheque, what I get after taxes and it's fairly close to 21%.. that's sick 21% in taxes and what do we get in return?.. not a whole fcukin lot!.. At least back home there where real befits to higher taxes!

[Jasman0717 8]

Good god!.. 21% that can't be right.. can it?.. actually I is.. I counted up my own cheque, what I get after taxes and it's fairly close to 21%.. that's sick 21% in taxes and what do we get in return?.. not a whole fcukin lot!.. At least back home there where real befits to higher taxes!

you get the protection of the best military in the free world

Right on

and nothing else.

[aidan80 9]

Stop crying. They take 27% of mine. I'd pay 21% anytime, any day. Welcome to America, where 10% of the people pay 80% of the taxes, and where 50% of the people pay 3% of the taxes.

Good god!.. 21% that can't be right.. can it?.. actually I is.. I counted up my own cheque, what I get after taxes and it's fairly close to 21%.. that's sick 21% in taxes and what do we get in return?.. not a whole fcukin lot!.. At least back home there where real befits to higher taxes!

We're all allow to complain about taxes and how all our money is being wasted and pished away in Iraq, Cuba, Afghanistan and everywhere else! Best military in the world.. wasn't the brits the best military in the world back when a bunch of colonist farmers kicked their arses out of america?

Maybe I'm missing something here but where did you invent those figures from?.. if 10% of the population are paying 80% of the taxes and 50% of the population are paying 3% of the taxes that means.. only 60% pay taxes totaling 83%? What about the other 40% of the population.. I suppose if I used logic it would say they pay the remaining 17% of the taxes?

God I hope they don't let you near the till at walmart!

Edited November 4, 2008 by aidan80

[mawilson 2,133]

My first paycheck was for 1 weeks work, and I had 13% deductions in taxes.

My next paycheck was for 2 weeks work and I had 21% deductions in taxes.

Er.... the tax rates are tiered and variable.

2007 Federal Tax Rate Schedules

If you're married filing jointly, you're taxed

10% of the amount over $0 but less than $15,650

15% of the amount over $15,650 but less than $63,700

25% of the amount over $63,700 but less than $128,500

28% of the amount over $128,500 but less than $195,850

33% of the amount over $195,850 but less than $349,700

35% of the amount over $349,700

Where did the 13% or 21% come from? Is that your average tax rate? I doubt it.

If your taxable income is $65,000, you pay 10% of $15,650 plus 15% of ($63,700 - $15,650) plus 25% of ($65,000 - $63,700) = $9,147.50

Therefore your average tax rate is $9,147.50 / $65,000 = 14.07%.

For your average tax rate to be 21%, your taxable income has to be close to $190,000 per year.

Also, your taxable income is NOT your gross income - it's your gross income minus all the deductions and exemptions.

If your taxable income is $190,000 (which is what it would be if your average tax rate were 21%), your gross wages are probably way over $250,000.

Seriously, let's not overreact.

[PlatyPius 5]

My first paycheck was for 1 weeks work, and I had 13% deductions in taxes.

My next paycheck was for 2 weeks work and I had 21% deductions in taxes.

Er.... the tax rates are tiered and variable.

2007 Federal Tax Rate Schedules

If you're married filing jointly, you're taxed

10% of the amount over $0 but less than $15,650

15% of the amount over $15,650 but less than $63,700

25% of the amount over $63,700 but less than $128,500

28% of the amount over $128,500 but less than $195,850

33% of the amount over $195,850 but less than $349,700

35% of the amount over $349,700

Where did the 13% or 21% come from? Is that your average tax rate? I doubt it.

If your taxable income is $65,000, you pay 10% of $15,650 plus 15% of ($63,700 - $15,650) plus 25% of ($65,000 - $63,700) = $9,147.50

Therefore your average tax rate is $9,147.50 / $65,000 = 14.07%.

For your average tax rate to be 21%, your taxable income has to be close to $190,000 per year.

Also, your taxable income is NOT your gross income - it's your gross income minus all the deductions and exemptions.

If your taxable income is $190,000 (which is what it would be if your average tax rate were 21%), your gross wages are probably way over $250,000.

Seriously, let's not overreact.

I'm pretty sure he's including Fed tax, state tax, medicare, and social security in that.

[~PalmTreeGurl~ 154]

Quick Question...

Now that my husband is here in the US, with SS number and working since June... when I file my taxes in Jan so I now file as married filing separate or joint? I dont understand what the difference would mean in how much we would be getting back in taxes

[himher 634]

You are missing something. Google.

Those figures are not invented. Tax data and income bracket data vs. percentage of total tax revenue is public record. Any moron can look it up.

Actually the percentage that pay nothing (or actually get credit for taxes never paid in the first place) has moved closer to 50% since 2006 (these are taxes filed in 2007 for the 2006 tax year) BUT there have been no changes in tax brackets etc in the last year so these numbers are very close but may be off by a percentage or two after the 2007 tax data (filed this year, 2008) is tabulated...

Here, I saved you some time since google.com seems to be a challenge -

1% of the taxpayers pay 40% of total taxes. (earners >$388,806)

10% pay 80% (earners>$108,904)

25% pay 86% (earners>$64,702)

50% pay 97% (earners > $31,987)

and 50% pay 3% (earners < $31,987)

SO - the bracket where between 10 and 50% of incomes fall, which is between 31,987 and 108,904, yields, as you so cleverly calculated, 17% of income tax revenue.

Stop crying. They take 27% of mine. I'd pay 21% anytime, any day. Welcome to America, where 10% of the people pay 80% of the taxes, and where 50% of the people pay 3% of the taxes.

Good god!.. 21% that can't be right.. can it?.. actually I is.. I counted up my own cheque, what I get after taxes and it's fairly close to 21%.. that's sick 21% in taxes and what do we get in return?.. not a whole fcukin lot!.. At least back home there where real befits to higher taxes!

We're all allow to complain about taxes and how all our money is being wasted and pished away in Iraq, Cuba, Afghanistan and everywhere else! Best military in the world.. wasn't the brits the best military in the world back when a bunch of colonist farmers kicked their arses out of america?

Maybe I'm missing something here but where did you invent those figures from?.. if 10% of the population are paying 80% of the taxes and 50% of the population are paying 3% of the taxes that means.. only 60% pay taxes totaling 83%? What about the other 40% of the population.. I suppose if I used logic it would say they pay the remaining 17% of the taxes?

God I hope they don't let you near the till at walmart!

[Nich-Nick 3,353]

Quick Question...

Now that my husband is here in the US, with SS number and working since June... when I file my taxes in Jan so I now file as married filing separate or joint? I dont understand what the difference would mean in how much we would be getting back in taxes

If you were married at any time in 2008, then you can file married filing jointly. That normally works out cheaper than married filing separately. You could do either, but if you run the numbers, most of the time the joint return results in a lower tax bill. Try it both ways on TurboTax and see how it comes out for you. There's so many factors that go into tax returns that it's impossible to say everybody will come out better filing joint.

[*JG* 2]

it depends on how many exemptions you claim also

sucks eh?

If you live or work in St. Louis City, you get another 1% city tax taken out. That really sucks.

[PlatyPius 5]

it depends on how many exemptions you claim also

sucks eh?

If you live or work in St. Louis City, you get another 1% city tax taken out. That really sucks.

Here in Putnam County, we have:

Federal Tax

State Tax

County Tax

City Tax

When I lived in Wyoming, we had:

Federal Tax

I miss Wyoming.

[himher 634]

I miss Alaska. No income OR sales tax

it depends on how many exemptions you claim also

sucks eh?

If you live or work in St. Louis City, you get another 1% city tax taken out. That really sucks.

Here in Putnam County, we have:

Federal Tax

State Tax

County Tax

City Tax

When I lived in Wyoming, we had:

Federal Tax

I miss Wyoming.

I miss Alaska. No (state) income OR sales tax

it depends on how many exemptions you claim also

sucks eh?

If you live or work in St. Louis City, you get another 1% city tax taken out. That really sucks.

Here in Putnam County, we have:

Federal Tax

State Tax

County Tax

City Tax

When I lived in Wyoming, we had:

Federal Tax

I miss Wyoming.

[PlatyPius 5]

it depends on how many exemptions you claim also

sucks eh?

If you live or work in St. Louis City, you get another 1% city tax taken out. That really sucks.

Here in Putnam County, we have:

Federal Tax

State Tax

County Tax

City Tax

When I lived in Wyoming, we had:

Federal Tax

I miss Wyoming.

Just searched for and found the actual numbers....

Greencastle, Indiana:

State Income Tax: Flat-Rate - 3.4% of AGI

Putnam County Income Tax - 1%

Greencastle City Income Tax - .25%

[Mononoke28 134]

Quick Question...

Now that my husband is here in the US, with SS number and working since June... when I file my taxes in Jan so I now file as married filing separate or joint? I dont understand what the difference would mean in how much we would be getting back in taxes

If you were married at any time in 2008, then you can file married filing jointly. That normally works out cheaper than married filing separately. You could do either, but if you run the numbers, most of the time the joint return results in a lower tax bill. Try it both ways on TurboTax and see how it comes out for you. There's so many factors that go into tax returns that it's impossible to say everybody will come out better filing joint.

Definitely. You can try to see how much you will get back if filing separately or filing jointly before actually filing. TurboTax lets you see the figures before you file and I actully like to use TaxAct which is only like $20-$25 to download. But I'm pretty sure that you'll find out that filing jointly will get you a higher tax return.

Diana