I am graduating senior beginning work at a BB this July. I have two questions about the taxes you pay as a first year analyst.
A) When you work from July to December, are you taxed in the $35,000 income bracket, or are you still taxed in the $70,000 bracket, even though you only earned 35 K?
B) With the W4 form, how many allowances do you tend to claim? Do you all file as the head of household or only claim allowances for being single and working one job?
Any input would be appreciated
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How much money you earn for the year 2010 will be reported on your W-2. Therefore, around 35kish will be taxed.
You shouldn't be able to claim anything if you are single and don't have any dependents or take care of anyone for more than half of all their expense. You would claim single.
Thats just my two-cents. I've been preparing income taxes this year.
Also, along similar lines, at what rate will your paychecks be taxed for the first 6 months, at the 70,000 prorated salary or at 35,000?
Here is what you need to do:
Assuming that you have no other income throughout the years, i.e. you will only make about $35,000 from all sources combined, you will have a standard deduction of $5700 and a personal exemption of $3650. Therefore you will be taxed on only ~$25K and you will owe the IRS $3,331.
Since you will be working for ~26 weeks then you will have to have $128 withheld from your check each week ($256 bi-weekly). Therefore, you can claim:
Single individual with 6 exemptions on your W-4 and you should be right on the money with your taxes (+/- a couple of bucks).
Just be careful and make sure that you have no other income and make sure that you are getting ~$130 withheld from your paycheck for federal taxes each week.
Let me know if you need help with your tax returns as well.
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Remember to keep track of un-reimbursed business expenses -- they are deductible.
No they are not deductible, only in certain cases when you itemize deductions if you actually run a business.
Only deductible if it is more than the standard deduction. Itemizing deductions have to be more than standard to deduct them. You must have a lot..and I mean. alot of expenses
So if you are married, how much less will you pay in taxes?
Depends on how much your combined income will be for 2010. If a married couple only makes $35K for the entire year combined then you will have $9350*2 = $18700 in deductions.
This will leave you with $16,700 of taxable income which off the top of my head will be around $2000-$2200 in tax liability vs. $3330 for an individual.
Don't forget about FICA and state taxes...they add up and it will likely put you under $2k for each paycheck
I know that, but the OP was about how to escape from paying too much federal tax. You can't escape FICA since it is automatically deducted from your paycheck at the correct amount.
So, assuming Street pay + NYC, how much would you say the average analyst is actually left with, after all the necessities are taken care of (i.e. after all the taxes, social security, medicare, insurance, rent, utilities, food, cable/internet, anything else?), for discretionary spending/saving at the end of the year, (nowaday) bonus included?
I brought this up in a different thread a while ago but never got a definitive response. Do you know the tax laws on deducting student loan payments? I have a huge outstanding loan balance and whether or not they're deductible means a swing of several thousand dollars. It seems that for the first 6 months (start job in July through end of year) the answer is yes, but beyond that is still unclear to me. Anyone know? If deductible at all, is there a certain income level above which they are no longer deductible? Will the size of my bonus influence this? (BB IBD, 10k signing/70k base/? bonus)
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