I'm being paid biweekly. The initial amount was 965.15 for payment. But after they removed taxes and retirement, I was left with 672.74. This works out to a little over 300 a week. Making it about 14k a year. I'm losing 11k to taxes and stuff...is this right? I claim as single and no dependencies.
2007-01-20 04:01:54 · 13 answers · asked by James U 2 in Business & Finance ➔ Taxes ➔ United States
Actually your net pay comes out to about $17,000 per year.
If you are claiming single and no dependants, then you are having the highest amount withheld from your paycheck. If you live on your own (you don't live with your parents, etc.), then you can claim at least one allowance on form W-4. This will reduce your federal withholding a bit. You are allowed to file a new W-4 with your employer at any time.
Look at your pay stub. Anything deducted from your check should be listed there and described in detail. Keep in mind that retirement funds withheld from your paycheck is YOUR money. You will eventually get it back. If it's part of a 401k plan and your employer matches all or part of your contribution, then it's like getting "free money" by participating in the plan. You can wait until retirement to withdraw the money, or if you quit, you can "cash in" your retirement. Keep in mind that most retirement deductions are pre-tax....that means you will pay tax on that money if you withdraw it before retirement age (plus a 10% penalty).
Keep in mind that you might get a refund when you file your tax return next year. What you owe in taxes is a result of your total gross income minus any deductions If you don't own a home (i.e. pay mortgage interest) you will likely take the standard deduction and personal exemption.
It's usually better to get a refund rather than having to pay additional tax. Unfortunately, the government doesn't pay you any interest on your money that they've held.
(Yes...people do feel screwed when they see how much is taken out of their paychecks by the government. Just think how people would feel if they actually received the entire gross amount and had to write a check for every one of those withheld amounts every two weeks. Think we'd be letting our congressment waste our money so much then?)
2007-01-20 04:07:46 · answer #1 · answered by Yep! 4 · 3⤊ 0⤋
This is how the ball bounces unfortunately. Dependants do not gain you that much more, if you really have dependants. You're still making out better in the grand picture because a wife and kids will cost you WAY more than what they give back to you (in taxes that is.) as opposed what they take out for taxes and social security. Welcome to being an adult. Isn't so great now that you're here; is it?
Now you know that you'll have to negotiate more later when you have more experience in your field.
2007-01-20 04:08:42 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Yep, that's right. You'll get it back when you file your taxes.
To get more money in your net (take home pay), claim 2 dependents, and you'll break even at tax time.
Also, contribute to your company's 401(k) plan to reduce your tax base. Contribute the amount equal to the full match that the company offers. For instance, if they match up to 4% of your investment, you contribute at least 4%. That's free money. It will sting at first, but it will benefit you more in the long run.
2007-01-20 04:11:56 · answer #3 · answered by Anonymous · 0⤊ 0⤋
25 000 / 26 = 961.53
Claiming Single Zero is what is killing you.
It's not dependencies, it's exemptions ... and you are entitled to an exemption for yourself.
Fill out a new W-4 form and claim Single One. Your take-home pay will go up.
2007-01-20 04:14:30 · answer #4 · answered by BoomChikkaBoom 6 · 0⤊ 0⤋
What I say to people in my home-based business is, add 3 or 4 dependents and you'd see a difference in your paychecks. This extra money is what they use to run their home business. On average it can cost about $130-160 monthly. Most of them like to say upfront that "I can't afford that". I simply give them that answer and they see the big picture.
My advice to you is to start a home-based business of your own and the taxman will surely smile on you.
If you'd like to know "What to look for in a home based business and how to evaluate an opportunity, feel free to give me a call at 784-455-1120 and I'll lead you to such help.
2007-01-20 04:09:33 · answer #5 · answered by Anonymous · 0⤊ 1⤋
welcome to reality. i wouldn't say you are getting screwed any more than me or anyone else. you need some deductions. if you buy a home, you can deduct interest. if you have biz related expenses - you may be able to deduct things like computers, internet service, cell phones, mileage, etc. talk to your accountant. there's ways to work within the system to save money. just do it legally.
2007-01-20 04:34:58 · answer #6 · answered by doogan 2 · 0⤊ 0⤋
Yep..Sucks doesn't it
The 25K is your Gross and what they hire you at. The 14K is your Net or "Take Home" Pay.
2007-01-20 04:04:32 · answer #7 · answered by OC1999 7 · 0⤊ 0⤋
Yeah, you are in line with the rest of us that the government is giving a hosing to.
2007-01-20 04:07:43 · answer #8 · answered by Beau R 7 · 0⤊ 0⤋
yes tis is right. you can change your w-4 and claim a dependent but you will owe at taxtime.
2007-01-20 04:08:35 · answer #9 · answered by pooh 6 · 1⤊ 0⤋
Welcome to RL.
You'll need to learn to budget between pay periods.
Give yourself an allowance per week, and save the rest.
Good luck.
2007-01-20 04:03:53 · answer #10 · answered by Geico Caveman 5 · 0⤊ 0⤋