Mystery Man
First Post
Queen_Dopplepopolis said:
You absolutely made my night.
U.S. Federal Withholding on Paychecks
- Thread starter Queen_Dopplepopolis
- Start date
You absolutely made my night.
Angcuru
First Post
That's tax taken out assuming you make that much for the whole year. End of the year comes, and you send in your tax forms with info on your actual earnings. Tax Refund. YAY!
I'll be getting a big one this year. At my pay rate, a full year would bring in about 75 grand. I'll earn about 25k this summer, but be taxed for a 75k income. Biiiiiig tax rebate for me.
I'll be getting a big one this year. At my pay rate, a full year would bring in about 75 grand. I'll earn about 25k this summer, but be taxed for a 75k income. Biiiiiig tax rebate for me.
Queen_Dopplepopolis said:That's what I thought - but was having a hard time finding someone to affirm that notion.
Well, federal tax rates are marginal -- income from $x to $y is taxed at one rate, $y to $z are taxed at another rate, etc. And the bottom brackets (0%, 10%, 15%, and 26%) are fairly close together, so a major increase it what your paycheck projects to annually will probably increase the percentage that's withheld by a lot.
QD,
The withholding from your paycheck is governed in-part by how much you have made YTD and in-part by how many allowances you claim on your W-4 form. In general, you will hit "breakpoints" or steps of salary, with a slight increase in the withholding % at each step.
In addition, you can exercise some control over the amount withheld by adjusting the allowances claimed on your W-4. Claiming "0" allowances means you will have the most withheld for taxes at each step. Each allowance you claim will reduce the amount withheld for taxes. You can use your allowances to try to "break even" on your taxes...ie, ending the tax year not owing the government any money - but also not getting a big tax refund.
Although a big tax refund can make you feel good or help pay off holiday bills...all you have done is give the government free use of your money for the year, for which they pay you no interest and don't even send you a thank you note (as noted by Iron Wolf above)
! If you find yourself getting a substantial refund each year, you need to adjust your allowances upward to get more money in your paycheck each month.
As a general rule, divide your tax refund by $800, drop any fractions and increase the W-4 allowances of the highest paid wage-earner in the family by that number. For instance, if your refund regularly runs around $2,000 per year - $2,000/$800 (drop fractions) yields 2, so the highest wage-earner would increase their W-4 allowances by 2.
Don't confuse allowances by the number of people in your family...they don't have anything to do with each other (that is personal exemptions).
~ OO
The withholding from your paycheck is governed in-part by how much you have made YTD and in-part by how many allowances you claim on your W-4 form. In general, you will hit "breakpoints" or steps of salary, with a slight increase in the withholding % at each step.
In addition, you can exercise some control over the amount withheld by adjusting the allowances claimed on your W-4. Claiming "0" allowances means you will have the most withheld for taxes at each step. Each allowance you claim will reduce the amount withheld for taxes. You can use your allowances to try to "break even" on your taxes...ie, ending the tax year not owing the government any money - but also not getting a big tax refund.
Although a big tax refund can make you feel good or help pay off holiday bills...all you have done is give the government free use of your money for the year, for which they pay you no interest and don't even send you a thank you note (as noted by Iron Wolf above)
! If you find yourself getting a substantial refund each year, you need to adjust your allowances upward to get more money in your paycheck each month.As a general rule, divide your tax refund by $800, drop any fractions and increase the W-4 allowances of the highest paid wage-earner in the family by that number. For instance, if your refund regularly runs around $2,000 per year - $2,000/$800 (drop fractions) yields 2, so the highest wage-earner would increase their W-4 allowances by 2.
Don't confuse allowances by the number of people in your family...they don't have anything to do with each other (that is personal exemptions).
~ OO
Angcuru
First Post
My oh my them W-4s....bah. Filled mine out today for the new job. Grant total of 1 allowance. Woohoo. Upside is that my employer can deposit my paycheck directly into my account, rather than doing the whole "get a check on Friday, deposit, wait a few days for it to clear" deal. Although I use Commerce Bank, which is speedy and reliable in just about everything, waiting is still waiting. Plus I get 3 ATM fee exemptions per month. Whee! 
I don't really mind giving the government a no interest loan. After all, I work for a company that constructs public buildings for the state (i.e. schools, libraries, etc), and gets paid by the state, which has federal subsidies. So...in a way...that's like a no interest loan...to myself.
I don't really mind giving the government a no interest loan. After all, I work for a company that constructs public buildings for the state (i.e. schools, libraries, etc), and gets paid by the state, which has federal subsidies. So...in a way...that's like a no interest loan...to myself.
DaveStebbins
First Post
Yup, just checked my statement from today and Federal W/H amounted to about 13% of my gross pay or a bit over 15% of my taxable pay.reveal said:
Ouch!
Angcuru
First Post
Ack! No no no! I just did some calculations and it looks like 20% of my paychecks are going towards taxes. And that's federal alone! 
It should really be only 3%. 
That's it. Come time to do my taxes, I'm going to find out EXACTLY how much I actually paid in taxes, and make a charitable donation to a random fund of that amount so the gov't doesn't get a cent in the long run. Crazy system.
It should really be only 3%. That's it. Come time to do my taxes, I'm going to find out EXACTLY how much I actually paid in taxes, and make a charitable donation to a random fund of that amount so the gov't doesn't get a cent in the long run. Crazy system.
Similar Threads
