Ask Paywizard.org - how do I calculate my net pay after tax? Paywizard.org gives an answer.
Question:
Let say I found a job that says will pay me 40K an year? How much will be EXACTLY what I'll be putting on my pocket, because after taxes I know is not 40K!! Which math do I need to make?? What's the percentage??
Answer Paywizard:
The tax rate you have to pay depends on your tax status (Single,
Married filing jointly etc.), age, deductions, dependents, plus the tax
of the state you live in.
The federal personal exemption increased to $3,650 from $3,500 (up $150) from 2008, but is phased out at higher income levels.
The great majority of
American taxpayers take the standard deduction rather than itemizing
deductions for expenditures such as mortgage interest, charitable
contributions, and state & local taxes. The standard deduction increased to $11,400 from $10,900 (up $500) for married couples filing a joint tax return, increased to $5,700 from $5,450 (up $250) for singles and married individuals filing separately, and increased to $8,350 from $8,000 (up $350) for heads of household.
2009 tax brackets:
| Tax Rate | Single | Married Filing Jointly | Married Filing Separately | Head of Household |
|---|---|---|---|---|
| 10% | $0 – $8,350 | $0 – $16,700 | $0 – $8,350 | $0 – $11,950 |
| 15% | $8,351– $33,950 | $16,701 – $67,900 | $8,351 – $33,950 | $11,951 – $45,500 |
| 25% | $33,951 – $82,250 | $67,901 – $137,050 | $33,951 – $68,525 | $45,501 – $117,450 |
| 28% | $82,251 – $171,550 | $137,051 – $208,850 | $68,525 – $104,425 | $117,451 – $190,200 |
| 33% | $171,551 – $372,950 | $208,851 – $372,950 | $104,426 – $186,475 | $190,201 - $372,950 |
| 35% | $372,951+ | $372,951+ | $186,476+ | $372,951+ |
Suppose your tax status is single under 65 without children, no deductions or dependents, then you would start with the following math. You start paying taxes above the filing threshold, which is your personal exemption of $3,650 and - if you don't itemize - the standard deduction for the single status of $5,700 = $9,350. So, you would pay 0% taxes over the first $9,350, over the next $8,350 10% and over the last part 15%. You also have to pay state and local tax, which vary per state.
Of course this was the easiest calculation possible, but it probably gives you an idea of the math.
If you have more specific tax questions, you can call the IRS 1-800-829-1040.