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Author: KATinChicagoland Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 120800  
Subject: Am I paying too much in taxes? Date: 11/21/1997 8:03 AM
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Scott, if you are simply wondering if the withholding on your paycheck is out of whack, then I agree with the earlier reply: it doesn't appear to be. But there are some other points that can be made.

If you make more than the social security wage base (around $64,000) as I recall), you do not pay the non-hospital portion of the social security tax after you reach that total in income. When you exceed that amount, your withholding suddenly goes down and you get a bigger paycheck. If you switch employers during the year, you may overpay your social security tax. In that case you need to claim a credit for it when you file your income tax return.

As to the income tax withholding, you should be aware that the amount withheld does not necessarily match the amount you owe. It's possible, depending on your marital status, dependents and other factors, that you are having too much withheld from your pay. That's not necessarily a terrible thing because it means you'll get a refund. My point is simply that the fact that you are having 41% withheld from your paycheck doesn't necessarily mean you are paying 41% in taxes. Your real tax rate may be lower.

KAT in Chicagoland
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