Need help Estimating 2013 taxes?

[goodoboy]

Hello,

We are trying to estimate our tax bill for 2013 tax year. We are trying to determine how much I can save on taxes if maxing out one 401K to the fullest, $17.5k.

I am using TurboTax® TaxCaster - Free Tax Calculator - Free Tax Estimator to approximate the numbers.

I need help determine taxable wages and federal withholding on the following:

Husband:
salary: 100K
401K contribute: $17.5K or 17.5%
# of Federal Allowances: 6
medical and dental pay percheck: $200
Texas

Wife
salary: 25K
401K contribute: $10%
# of Federal Allowances: 0
medical and dental pay percheck: $0
Texas


If can figure out taxable wages and federal withholding, I can perform the rest. Any help with the taxable wages and federal withholding for husband and wife.

Any help or direction to online calculator would be nice.

[bondebj26]

To better assist, getting your # of dependents, whether you itemize or use standard deduction, any other non-W2 income (investments, etc.) if you have any other federal credits available to you, etc. would be helpful. This way you can determine what your tax bracket is, with the goal being determining what your actual tax lliability should be to properly answer your question. The next step is then adjust your allowances to ensure that your withholdings are not substantially higher than they need to be leading to a big refund. Many posts on that subject, if you are in the boat of wanting a big refund or keeping the money throughout the year.

[goodoboy]

To better assist, getting your # of dependents, whether you itemize or use standard deduction, any other non-W2 income (investments, etc.) if you have any other federal credits available to you, etc. would be helpful. This way you can determine what your tax bracket is, with the goal being determining what your actual tax lliability should be to properly answer your question. The next step is then adjust your allowances to ensure that your withholdings are not substantially higher than they need to be leading to a big refund. Many posts on that subject, if you are in the boat of wanting a big refund or keeping the money throughout the year.

Thanks,

I use the standard deduction.
No other income besides work.
I perfer bring my money home each pay period.

The problem is I want to make sure my pay check is not so low I can't save in my savings account accordingly. I have emergency fund already for 6 months.

[kaneohe]

something like this? http://www.wsu.edu/payroll/cgi-bin/withhold2012.cgi

You probably want to talk to the payroll dept to get the real numbers but this might be close. You might want to
google "withholding calculator" to see if you can get 2012 numbers. The IRS has a calculator but it was done for maintenance when I tried.

that link didn't work the 1st time. take 2........
http://www.wsu.edu/payroll/cgi-bin/taxcalc2012.htm

[bondebj26]

If you are looking for how much you will save in taxes, for every dollar you are contributing to your 401k, you will save 32.65% in total taxes (currently in 25% tax bracket for 2013 + FICA taxes of 7.65%).

Just running the numbers quick, with $4800 in insurance premium deductions for the year, and $20,000 total 401k contributions, you would have $80,200 in taxable income for 2013. The 15% tax bracket ends at $72,500.

In the scenario you are you showing, your total Federal tax bill would be about $12,000, $1925 of which is for the $7700 of income taxes at the 25% tax bracket. If your husband uses 6 exemptions he would be paying about $240/paycheck withheld each pay period, which is about $250/mo short of total withholdings needed. No exemptions gets you to $360/paycheck withheld

paycheckcity.com has a good calculator to use to play around with. Once you figure out how much you need to take home, then you can figure out where you need to put your retirement savings - Roth (for if you think your tax rate will be higher in the future than 25%), or have your wife kick in more to her 401k to get into the 10% tax bracket. From there your HR department can help you with the W-4 for exemptions if you just tell them how much you want withheld from each paycheck.

[bondebj26]

I meant increase your wife's 401k deductions to get to the 15% tax bracket.

[22twain]

If you are looking for how much you will save in taxes, for every dollar you are contributing to your 401k, you will save 32.65% in total taxes (currently in 25% tax bracket for 2013 + FICA taxes of 7.65%).

My FICA taxes are based on gross salary, before subtracting tax-deferred retirement-plan contributions. I'm on a 403b plan, but I doubt it's different for a 401k.

[goodoboy]

In the scenario you are you showing, your total Federal tax bill would be about $12,000, $1925 of which is for the $7700 of income taxes at the 25% tax bracket. If your husband uses 6 exemptions he would be paying about $240/paycheck withheld each pay period, which is about $250/mo short of total withholdings needed. No exemptions gets you to $360/paycheck withheld
.

Where the number do the numbers $12K, $1925, and $7700 come from? So approximation much do I owe the government end of 2013?

[goodoboy]

Just running the numbers quick, with $4800 in insurance premium deductions for the year, and $20,000 total 401k contributions, you would have $80,200 in taxable income for 2013. .

Thanks, how do you calculate $80,200 in taxable income for 2013? Thank you

[goodoboy]

If you are looking for how much you will save in taxes, for every dollar you are contributing to your 401k, you will save 32.65% in total taxes (currently in 25% tax bracket for 2013 + FICA taxes of 7.65%).

Just running the numbers quick, with $4800 in insurance premium deductions for the year, and $20,000 total 401k contributions, you would have $80,200 in taxable income for 2013. The 15% tax bracket ends at $72,500.

In the scenario you are you showing, your total Federal tax bill would be about $12,000, $1925 of which is for the $7700 of income taxes at the 25% tax bracket. If your husband uses 6 exemptions he would be paying about $240/paycheck withheld each pay period, which is about $250/mo short of total withholdings needed. No exemptions gets you to $360/paycheck withheld

paycheckcity.com has a good calculator to use to play around with. Once you figure out how much you need to take home, then you can figure out where you need to put your retirement savings - Roth (for if you think your tax rate will be higher in the future than 25%), or have your wife kick in more to her 401k to get into the 10% tax bracket. From there your HR department can help you with the W-4 for exemptions if you just tell them how much you want withheld from each paycheck.

Thanks,

How do I calculate how much taxable income and withholding for husband and wife, so I can run the number here http://turbotax.intuit.com/tax-tools/ca ... taxcaster/?

Once I can get an approxiamtion on how much I owe the gov at end of year 2013, this will let me know how much I need to save from my reduced pay check.

Thanks

[LadyGeek]

This thread is now in the Personal Finance (Not Investing) forum (taxes).