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How much tax is taken out of your paycheck?

I live in Philadelphia and this is what I get hit with:

Federal Tax: Varies between 15% to 20% depending on how much OT I work
Social Security: 6.20%
Medicare: 1.45%
PA State Tax: 3.07%
PA UnEmployment: 0.09%
Phila. Tax: 4.30%

So thats 30.11% to 35.11%

On a 65k/yr salary I net 42k to 46k.

Isn't that crazy how much Uncle Sam takes away from me?

Is there any way that I reduce my taxes?

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Well, since it is going there anyways...<br><br>It looks like you have two choices:<br><br>1) Get fired. Go on the gove... (more)

Dus10 (Dec. 30, 2006 @ 5:54a) |

Support the fairtax AND/OR move to florida ... No state income tax and latly the hurricanes haven't been bad.

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samko said: <blockquote><hr>Part of the reason the very wealthy pay little in taxes is because of the low capital gains ... (more)

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qlogick said: [Q]How much tax is taken out of your paycheck?

I live in Philadelphia and this is what I get hit with:

Federal Tax: Varies between 15% to 20% depending on how much OT I work
Social Security: 6.20%
Medicare: 1.45%
PA State Tax: 3.07%
PA UnEmployment: 0.09%
Phila. Tax: 4.30%

So thats 30.11% to 35.11%

On a 65k/yr salary I net 42k to 46k.

Isn't that crazy how much Uncle Sam takes away from me?

Is there any way that I reduce my taxes?

Claim less exemptions? But you'll pay more tax time. Either way, if we knew the answer we would do it too.

I got a nice bonus this year, and HALF of it was taken away in taxes. I was like, what's the point of a bonus then!?

let me guess, you just got your first job out of college?

That sucks that the city taxes your paycheck. Move to FL where there is no State income tax.

Just wait, now that Rendell is Governor he is creating more new and exciting taxes for the rest of the state.

You should look for a job in KOP, Conshocken, etc. and move out of the city to escape the wage tax.

qlogick said: [Q]

Is there any way that I reduce my taxes?

that is the question everyone wants to know

I live in Wisconsin

GROSSS $20128.24

FED $1831.92 9.1%
MED $291.86 1.45%
FICA $1247.95 6.2%
WI W/I $935.7 4.65%

Single 01 ! =D

qlogick said: [Q]

Is there any way that I reduce my taxes?

You are confusing "withholding" with "taxes".

You shouldn't care about the withholding so much, but you DO want to reduce your taxes.

There are two ways to do it: you can reduce your taxable income by using pretax money for 401Ks, IRAs and FSAs; and you can get deductions for things like a mortgage.

qlogick said: [Q]
Isn't that crazy how much Uncle Sam takes away from me?

Is there any way that I reduce my taxes?

As someone else said this is only the withholding (not the actual taxes you pay). If you typically see a large tax refund and would rather see the money now, you can easily increase your take-home pay by updating your W-4 form with more exemptions via your employer. The IRS website has a calculator to determine how many exemptions to use based on your anticipated tax due, in order to maximize your take-home pay (without owing any tax when you file).

I don't quite understand the point why people should list their taxes and social security. Also you should not confuse medicare and social security with taxes. You can look up taxes in any tax table. And StevenColorado already gave you a short list how to reduce your taxable income.

GermanExpat said: [Q]I don't quite understand the point why people should list their taxes and social security. Also you should not confuse medicare and social security with taxes. You can look up taxes in any tax table. And StevenColorado already gave you a short list how to reduce your taxable income.

SS and Medicare are indeed taxes. They are listed on my paycheck as such also.

If you mean that you get them back so they are not taxes, then the same can be said of any tax as you get them back in the form of roads, bridges, government services. With that said, the total tax held out of my check this year was around $23,000 including SS and Medicare. I'll have to pay about $1,800 Federal (not sure of state) because of overages in my 401k that I hadn't planned on (returned money! <img src="i/expressions/face-icon-small-sad.gif" border=0> )

qlogick said: [Q]

I live in Philadelphia and this is what I get hit with:
Plus when u spend, they take out another 7%<img src="i/expressions/face-icon-small-wink.gif" border=0>

your choices are:

make less, so as to fall into a lower tax bracket;
make more, so as to exceed the social security cap;
defer more, so as to have less taxable income;
move to a lower tax city and state.

Personally, I recommend all 4.<img src="i/expressions/face-icon-small-happy.gif" border=0>

The wife works 1/2 time because her earnings are hit so hard.
I work more than full-time because I exceed the SS limit.
I defer everything I can.
In WA, we have no state income tax, and no local income taxes.

OP -

Move to Ohio and you'll be hit with 7.5% state income tax AND in some cases, be hit with a 2% tax in the city you work and another 2% in the city where you reside. That is one of the major reasons I am living in Illinois (3% state, NO local income tax).

StevenColorado laid out the legal ways to reduce your taxable income.

Welcome to the wonderful world of work!

[Q]Is there any way that I reduce my taxes?

Join the Mafia<img src="i/expressions/face-icon-small-smile.gif" border=0>.......

Of course, one shouldn't forget that Al Capone was finally nailed for tax evasion.......<img src="i/expressions/face-icon-small-happy.gif" border=0>

jlawrence01 said: [Q]OP -

Move to Ohio and you'll be hit with 7.5% state income tax AND in some cases, be hit with a 2% tax in the city you work and another 2% in the city where you reside. That is one of the major reasons I am living in Illinois (3% state, NO local income tax).

StevenColorado laid out the legal ways to reduce your taxable income.

Welcome to the wonderful world of work!
As a Ohio resident, that's not quite true. Generally you can take a credit on city tax where you live based on the city tax you pay where you work. The amount of credit you can claim varies, 50% of what you paid being common. City taxes also vary, and while many are 2%, almost as many are less than that while only a few are more. So it's not quite as bad as you think, but it does make tax time more complicated than it should be and is definitely worse than Illinois.


make sure you owe them a little bit every year, thats 0% for up to 12 months my friend. by little i mean run it close like less than 500 bucks so they don't get mad. give it a rest now and then. if you ever get money back you just loaned it to the govt for 0% (up to 12 months).

thats the FW way!

qlogick said: [Q]

Is there any way that I reduce my taxes?
Really no way to reduce the taxes you listed, Best you can do will be raising your taxes by earning more and in the end taking home more.
Was just looking at my last pay stub of the year and saw I paid a bit over 45% in taxes and SS/Medicare. And now to get look forward to 1099's coming in to see how much more I must pay.

sloth911 said: [Q]Just wait, now that Rendell is Governor he is creating more new and exciting taxes for the rest of the state.

Rendell's a heck of a lot better than the republicans, who cater to
the special interests and the big corporations. That said, no need to
get too political in this forum :-p

TheThinker said: [Q]

Rendell's a heck of a lot better than the republicans, who cater to
the special interests and the big corporations. That said, no need to
get too political in this forum :-p
Sure, Much better than those Liberal Democrats taking our money and giving it to a bunch of Welfare cheats. After many years of having a Republican Governor here in MA we are now back to a Democrat, Taxachusetts here we come again. But Politics not needed here

$641.84

psychtobe said: [Q]your choices are:

make less, so as to fall into a lower tax bracket;

Federal tax brackets aren't absolute. If I'm on the border of a tax bracket only the different of the higher amount is taxed at the higher rate, not my entire income. So suggesting to make less to "save" on taxes is suggesting to give up money.

I would suggest taking advantage of tax deferred investments (401k / IRA), doing your taxes properly and getting every possible deduction, creating a business for write-offs, etc

kamalktk said: [Q]jlawrence01 said: [Q]OP -


Welcome to the wonderful world of work!
As a Ohio resident, that's not quite true. Generally you can take a credit on city tax where you live based on the city tax you pay where you work. The amount of credit you can claim varies, 50% of what you paid being common. City taxes also vary, and while many are 2%, almost as many are less than that while only a few are more. So it's not quite as bad as you think, but it does make tax time more complicated than it should be and is definitely worse than Illinois.

In Ohio, it depends on which city you live and work in. If you live and work in unincorporated areas, you pay NO city taxes. However, if you live in certain suburbs of Cleveland like Lakewood, Bay Village, etc., the credit you reference is very limited and nowhere close to 50%.

What **IS** absolutely ridiculous, is the amount of paperwork that you have to complete for local taxes. I have friends who do contract work who file as many as SEVEN municipal returns (my personal high was five). Add that MOST dual income households file MARRIED FILING SEPARATE in order to reduce their state tax liability, and all I have to say is that it keeps a lot of CPAs very busy. In fact my prior employer provides tax preparation services as a benefit to ALL employees.

TheThinker said: [Q]sloth911 said: [Q]Just wait, now that Rendell is Governor he is creating more new and exciting taxes for the rest of the state.

Rendell's a heck of a lot better than the republicans, who cater to
the special interests and the big corporations. That said, no need to
get too political in this forum :-p

He turned Phila into a Tax nightmare. Now he is working on the state.

There is a new unemployment tax because of Rendell, this money used to come from the state budget. Instead of practicing physical restraint, he created a new tax.

He is all but forcing school districts to implement an earned income tax to "save" on property taxes in conjunction with the casinos - talk about "catering" to speacial interests... that casinos are laughing all the way to the bank.

He has signed a bill to bring CA emissions to PA.

He wants to sell the PA turnpike to foreign investors??????????

This is the little I know, hard to find out more because the Phila Inqurier never reports this stuff. However, when I am home for the Holiday's I read the Hbg Partriot which talks about this stuff.

scott1961 said: [Q]And now to get look forward to 1099's coming in to see how much more I must pay.

Ugh, I can only imagine the tax bill from your 1099s <img src="i/expressions/face-icon-small-smile.gif" border=0>

Kinda related to the OP's post, for the month of December, I decided I wanted to save a little extra in my company's 401k before the year ended. So I changed my paycheck deferral from 15% to 50%. So of course, the actual take-home pay that hit my bank account was tiny. However, the taxes withheld from the paycheck were also much much smaller than usual. That was a nice little benefit I had forgotten I would see.

i'm a state employee, so i'm going to include everything that gets taken out:

Soc Sec
Federal Income Tax
Medicare
State Income Tax
Public Employees Retirement
State Life Insurance

totals: 942.80, 27.99% of my paycheck


markkundinger said: [Q]

Kinda related to the OP's post, for the month of December, I decided I wanted to save a little extra in my company's 401k before the year ended. So I changed my paycheck deferral from 15% to 50%.
Good Idea to make those kind of changes in December. I always meet with my account beginning of December and go over what my year end W2 along with an estimate of 1099 INT. It's one thing to have to pay taxes but penalties really sux and our unnecessary. I don't pay any quarterly estimates on interest but do withhold an extra couple hundred a week to help offset. Since 2006 was great a year for bank interest my extra withholdings came up far short and would have gotten a big penalty. IRS will not allow you to make a big estimated payment at end of year, But you can thru your regular payroll deductions. So I just have a bonus called in for me and have it all go towards taxes.

jlawrence01 said: [Q]kamalktk said: [Q]jlawrence01 said: [Q]OP -


Welcome to the wonderful world of work!
As a Ohio resident, that's not quite true. Generally you can take a credit on city tax where you live based on the city tax you pay where you work. The amount of credit you can claim varies, 50% of what you paid being common. City taxes also vary, and while many are 2%, almost as many are less than that while only a few are more. So it's not quite as bad as you think, but it does make tax time more complicated than it should be and is definitely worse than Illinois.

In Ohio, it depends on which city you live and work in. If you live and work in unincorporated areas, you pay NO city taxes. However, if you live in certain suburbs of Cleveland like Lakewood, Bay Village, etc., the credit you reference is very limited and nowhere close to 50%.

I live in Shaker Heights and work in Beachwood. RITA is the tax org for much of the Cleveland area. Bay Village gives 100% credit. Lakewood gives 50% credit (not listed on that chart, but on the 2005 chart here. You are confusing the credit with the credit limit. In some cases, like for myself in Shaker Heights, I get a 50% credit, limited to 1%, but pay 1.75% in Shaker. Yes, this makes local taxes a PITA. PITA/RITA, coincidence, I think not.

You can view presidential tax returns here: Tax History Project
Every year when the presidential tax returns are reported, I calculated what percent they pay and it's usually about 20-25%. That's what the wealthy, who open their returns to the public, pay. I can only imagine how little the wealthy who do not disclose their tax returns pay. The most recent tax cut has benefited the wealthy at the expense of the middle class.

fallenangel99 said: [Q]
I got a nice bonus this year, and HALF of it was taken away in taxes. I was like, what's the point of a bonus then!?
Bonuses are almost always withheld at the "wrong" tax rate -- as if you made that amount plus your normal salary every pay period. Since the withholding isn't correct, you get back the difference later.

With all my deductions, which includes a large contribution to my TSP plan (401k), about 49% of my gross pay I don't see in my paycheck. As far as Federal taxes, about 13% of my pay is deducted for that. My mortgage deduction is getting less and less as I pay it down, so I do expect to owe some more Federal taxes when I file.

smackfu said: [Q]fallenangel99 said: [Q]
I got a nice bonus this year, and HALF of it was taken away in taxes. I was like, what's the point of a bonus then!?
Bonuses are almost always withheld at the "wrong" tax rate -- as if you made that amount plus your normal salary every pay period. Since the withholding isn't correct, you get back the difference later.If your bonus is relatively constant, just claim more exemptions on your regular salary, it will help balance it out.

My latest pay check received today in Florida:

FICA - 7.65%
FED WT - 9.415%
Total: 17.06%

401K is in black out period right now so it didn't get deducted.

breaux124 said: [Q]psychtobe said: [Q]your choices are:

make less, so as to fall into a lower tax bracket;

Federal tax brackets aren't absolute. If I'm on the border of a tax bracket only the different of the higher amount is taxed at the higher rate, not my entire income. So suggesting to make less to "save" on taxes is suggesting to give up money.

of course. that's one way to pay less taxes.

samko said: [Q]You can view presidential tax returns here: Tax History Project
Every year when the presidential tax returns are reported, I calculated what percent they pay and it's usually about 20-25%. That's what the wealthy, who open their returns to the public, pay. I can only imagine how little the wealthy who do not disclose their tax returns pay. The most recent tax cut has benefited the wealthy at the expense of the middle class.dcwilbur and cheezedawg gave my prior post a red, so maybe I should elaborate.

Person.........Year.........AGI...........Federal Income Tax..........Tax as a Percent of AGI
GW BUSH........2005........$735,180.......$187,854........................25.55%
GW Bush........2004........$784,209.......$207,307........................26.44%
GW Bush........2003........$822,126.......$227,490........................27,67%
GW Bush........2002........$856,058.......$268,719........................31.39%
GW Bush........2001........$811,100.......$250,202........................30.85%
GW Bush........2000........$894,880.......$240,342........................26.86%
Cheney.........2005........$6,857,849.....$529,636.........................7.7%
Cheney.........2004........$1,734,373.....$393,518........................22.69%
Cheney.........2003........$1,267,915.....$253,067........................19.96%
Cheney.........2002.......................................................................29.24%
Cheney.........2001.......................................................................39.49%
John Kerry.....2003.......................................................................22.91%
John Kerry.....2002.......................................................................20.78%
John Kerry.....2001.......................................................................?????
John Kerry.....2000.......................................................................21.26%
Clinton........1999..........$416,039.........$92,104.....................22%

I could do more, but I'm tired. I hope this is an accurate way of accounting for this and please reply if it's not (don't just give red without an explanation).
Part of the reason the very wealthy pay little in taxes is because of the low capital gains tax rate and also because you only pay into social security up to a certain amount of your income; the rest is exempt.
Also, for those of you receiving paychecks, remember that your employer pays the other half of your social security as well as some other taxes.

samko said: [Q]

Person.........Year.........AGI...........Federal Income Tax..........Tax as a Percent of AGI

Cheney.........2005........$6,857,849.....$529,636.........................7.7%


I could do more, but I'm tired. I hope this is an accurate way of accounting for this and please reply if it's not (don't just give red without an explanation).
Part of the reason the very wealthy pay little in taxes is because of the low capital gains tax rate and also because you only pay into social security up to a certain amount of your income; the rest is exempt.

Also Cheney gave $6.8 Million to charities in 2005, Add that into what he paid in taxes and picture looks a little different. Just like the Republicans giving so those less fortunate Democrats will be taken care of.

qlogick said: [Q]How much tax is taken out of your paycheck?

I live in Philadelphia and this is what I get hit with:

Federal Tax: Varies between 15% to 20% depending on how much OT I work
Social Security: 6.20%
Medicare: 1.45%
PA State Tax: 3.07%
PA UnEmployment: 0.09%
Phila. Tax: 4.30%

So thats 30.11% to 35.11%

On a 65k/yr salary I net 42k to 46k.

Isn't that crazy how much Uncle Sam takes away from me?

Is there any way that I reduce my taxes?

There's actually a good way to do it in your situation... and most people ignore it...

Move to New Jersey. Here's how it works... you'll now pay NJ State Tax and not PA State Tax. The bonus is that you can take a credit for your Philly wage tax against your NJ State Tax. Basically, it saves you that 4.3%.

In many cases (if you live along the PATCO High Speed line), the commute into the city is easier than from the PA side.

jayK said: [Q]smackfu said: [Q]fallenangel99 said: [Q]
I got a nice bonus this year, and HALF of it was taken away in taxes. I was like, what's the point of a bonus then!?
Bonuses are almost always withheld at the "wrong" tax rate -- as if you made that amount plus your normal salary every pay period. Since the withholding isn't correct, you get back the difference later.If your bonus is relatively constant, just claim more exemptions on your regular salary, it will help balance it out.

Bonuses aren't generally withheld at the rate as if you earned that every pay period. This implies that if you make $48k per year ($2k per pay period) and you got a $5k bonus, you'd pay taxes as if you may $154k per year)

They are usually withheld at the top marginal rate that you'd pay based on your full year salary (so, you'd pay taxes at the marginal rate for $48k-53k based on the example above)). This can be a bit high since the reality is that your AGI will likely be significantly lower (based on IRA contributions, exemptions, other deductions).

Skipping 4 Messages...
samko said: [Q]Part of the reason the very wealthy pay little in taxes is because of the low capital gains tax rate and also because you only pay into social security up to a certain amount of your income; the rest is exempt.
Also, for those of you receiving paychecks, remember that your employer pays the other half of your social security as well as some other taxes.

There is a difference between social security and income taxes. The fact that there are caps on SS/Medicare taxes has nothing to do with your effective income tax rate.






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