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Author: brianboro Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121144  
Subject: Tax Bracket? Date: 12/17/2001 3:07 PM
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This may seem very elementry, BUT how do I know which tax bracket I'm in and what my Tax % is... I just got my first salaried job ever (I'm 24) and make $31,400 annually. What else do I need to find out?
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Author: lorenzo2 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 56079 of 121144
Subject: Re: Tax Bracket? Date: 12/17/2001 3:43 PM
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To a large extent, you don't have to worry about it. Your employer will have you fill out a withholding form, and based on your income and marital status, approximately the right amount will be withheld from your paycheck. Likewise for state taxes. But if you really want to know, see the IRS tax table at:

http://ftp.fedworld.gov/pub/irs-pdf/i1040tt.pdf

Assuming you're single, you're almost certainly in the lowest (15%) bracket. That bracket ends at $27,050 and you're a shade above that - but the tax tables are dealing with taxable income, not gross income. After taking a standard deduction and exemption, you'll be somewhat below that number.

Congrats on your first job ever!

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Author: lorenzo2 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 56080 of 121144
Subject: Re: Tax Bracket? Date: 12/17/2001 3:46 PM
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P.S. The tax table I pointed you to is the one you use until your taxable income exceeds $100K. But see the last page of that document to see the various rates and thresholds for single, married, etc.

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Author: joebedford Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 56084 of 121144
Subject: Re: Tax Bracket? Date: 12/17/2001 7:53 PM
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I would have to respectfully disagree with the comment "you don't have to worry about it". You could be hit with an underwitholding penalty if you don't have enough withheld, and it can happen. (I know because it happened to me once, and my employer sure as heck didn't pay it.) Forewarned is forearmed. Plus, with a little planning you can get your situation pretty close to where you want it (as in small refund, small payment, larger payment, whatever). Pays to do a little homework, IMHO.

Thanks!
Joe

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Author: lorenzo2 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 56088 of 121144
Subject: Re: Tax Bracket? Date: 12/17/2001 8:50 PM
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I would have to respectfully disagree with the comment "you don't have to worry about it". You could be hit with an underwitholding penalty if you don't have enough withheld, and it can happen. (I know because it happened to me once, and my employer sure as heck didn't pay it.) Forewarned is forearmed. Plus, with a little planning you can get your situation pretty close to where you want it (as in small refund, small payment, larger payment, whatever). Pays to do a little homework, IMHO.

If you fill out the form (W-4) properly, your withholding should be close to bang on correct. But I agree that it pays to look at your first paystub, project what your full year withholding will be, and see if it's roughly correct. As for the original poster, he's almost certainly in the clear. He said this was his first salaried job, from which it's reasonable to infer that this is his first tax return. There's no penalty, no matter how badly you're underwithheld, if you had no tax liability the previous year.

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Author: joebedford Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 56236 of 121144
Subject: Re: Tax Bracket? Date: 12/22/2001 2:05 PM
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Still disagreeing. =) If my wife and I both filled out our W-4's "correctly", we would be woefully under-withheld. Instead, we both claim zero exemptions, and still have to have an additional amount withheld each month to satisfy our tax obligation.

You are right though in that the original poster is probably okay. I just think it pays to look at these things closely and to understand how they work. =)

Thanks!
Joe

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