Why is 32% taken from my pay for taxes?

Question

I got an increase in pay, but the amount they're taking is rediculous! I am single and claiming "3" on my W4.

1. Is this normal and correct?
2. Will I get a lot back when I file my taxes?

To follow up...$80,000 and I live in CA. This is not my first job but it is my first job in CA.

I am comparing my net pay to my gross pay to calculate 32%

Answer 1

Depends on what your gross paycheck is. Also, remember your employer takes out federal withholding, social security (6.2%), medicare (1.45%), and state withholding (if you have a state income tax). Social security and medicare withholding are fixed %'s and have no bearing on what you claimed on your W-4. Are you just calculating the 32% from your federal withholding or are you calculating the 32% from your net pay compared to your gross pay?

Answer 2

If too much is being taken out, increase your withholding allowances on a new W-4. However, you need to figure out how much tax you are likely to owe at the end of the year and how much is being withheld and determine if you are withholding too much or not enough. If you don't own a home, then you probably do not have a schedule A. Therefore, you need to do a mock tax return or do the IRS worksheets to figure your tax. Without a schedule A, you probably have just the Form 1040, so you figure your income, subtract your exemptions and your standard deduction. What is left is your taxable income. Your tax is calculated on your taxable income and comes from a table. You can Google 2007 income tax rates - or whatever year it is. You owe what you owe, what matters is how much you have withheld throughout the year - your withholdings offsets your tax due at tax time. If you withheld too much you get a refund while the opposite is true. If this is just too much information, you should get a tax professional, preferably a CPA and get some help. If you are so inclined, you can google a lot of this info, but some numbers should probably be crunched! Good luck! Try http://www.irs.gov/pub/irs-pdf/p505.pdf and/or www.irs.gov/individuals/article/0,,id=96196,00.html

Answer 3

The information I'd need is what kind of taxes are you referring to? If you're paying 32% to be divided between social security, federal, state, and whatever else then you are at the correct withholding rate (claiming 3). If you're only referring to federal taxes then you need to take another look at your W4 to ensure your information is correct. To answer your other question I'd need to know more: do you have children? Are you head of a household? Do you pay alimony? Have you taken a loss in business, etc? Assuming your answer is no to all of the above you would owe money.

Answer 4

I think this is about right. If you are in CA. They take fed tax, state tax, and medicare. Claiming 3 still get 32%? I am claiming 2 but my income is not high like yours, and I get around 28-30% already.
One way you want to get a lot of tax return is to join 401K, donation, mortgage, and if you spend 7.5%+ of your income for out of pocket medical purposes.
It's CA. It's expensive. If you live in Alameda county, sales tax is the highest in the whole USA at 8.75%.

Answer 5

can't answer that without knowing how much your gross pay is and what state you live in. Besides federal income tax, you have soc sec tax at 7.65% and possibly state and local income tax, which could add a few more percent to the mix. If you claim single and 3 and you are single and only have yourself - you will OWE a lot of federal tax come January

Answer 6

That sounds about right for CA with that high of an income - you're paying social security, medicare, federal income tax withholding, and various CA taxes.

Answer 7

is this your first job?
have you ever filed taxes?
you should know the answers to these questions
1. 32 % is about the average total tax rate
2. claiming 3 you may have to pay a small amount of taxex next time you file.

Answer 8

You will get a good return if you have the right person filing for you.

Your taxes are used to earn interest and sqaundered on unnecessary military ammunition for an unnecessary war, as opposed to buying food and medicine for the poor.