California - clarification on taxes

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JustinR
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California - clarification on taxes

Post by JustinR » Wed Aug 16, 2017 4:27 am

I'm trying to get something straight.

Say I'm in the 28% federal marginal bracket. I'm in California. Does this mean, that for the last dollar I make from my employer, I lose this in taxes:

Fed: 28%
State: 9.3%
SDI: 0.9%
Social Security Tax: 6.2%
Medicare Tax: 1.5%
-------
45.9% in taxes?


So for every extra dollar I make, I actually only made 54 cents? Is this correct?

Don't worry about the exact income value. Assume the above marginal tax values.

Edit: So if you itemize you can subtract 28% * 9.3% = 2.6%, which means your tax is 43.3%.
Last edited by JustinR on Wed Aug 16, 2017 6:52 am, edited 1 time in total.

mac808
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Re: California - clarification on taxes

Post by mac808 » Wed Aug 16, 2017 5:58 am

Yes, but with some caveats:

- The 6.2% social security tax only applies on the first $127,200 of earnings (2017). The 28% Federal bracket goes up to $191,650 (2017). So to the extent your taxable income falls between those two numbers, your marginal tax rate would decrease for dollars beyond $127,200.

- If you itemize, you can deduct state taxes paid, which brings down the effective rate.

I've always regarded California as a relatively brutal tax landscape for single, non-homeowner (i.e. no prop 13 benefit) earners in the $120k range, who just get creamed on a % basis while living in some very HCOL areas.
Last edited by mac808 on Wed Aug 16, 2017 6:05 am, edited 6 times in total.

UncleBen
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Re: California - clarification on taxes

Post by UncleBen » Wed Aug 16, 2017 5:59 am

Well, if you itemize you can deduct the state income taxes from your federal. So that would save you 2.6% technically bringing your total marginal rate down to 43.3% letting you keep $.567. Do you feel richer :wink: ?

Also, if you can get above $127,200 the 6.2% SS tax drops off.

JustinR
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Re: California - clarification on taxes

Post by JustinR » Wed Aug 16, 2017 6:11 am

mac808 wrote:
Wed Aug 16, 2017 5:58 am
Yes, but with some caveats:

- The 6.2% social security tax only applies on the first $127,200 of earnings (2017). The 28% Federal bracket goes up to $191,650 (2017). So to the extent your taxable income falls between those two numbers, your marginal tax rate would decrease for dollars beyond $127,200.

- If you itemize, you can deduct state taxes paid, which brings down the effective rate.

I've always regarded California as a relatively brutal tax landscape for single, non-homeowner (i.e. no prop 13 benefit) earners in the $120k range, who just get creamed on a % basis while living in some very HCOL areas.
UncleBen wrote:
Wed Aug 16, 2017 5:59 am
Well, if you itemize you can deduct the state income taxes from your federal. So that would save you 2.6% technically bringing your total marginal rate down to 43.3% letting you keep $.567. Do you feel richer :wink: ?

Also, if you can get above $127,200 the 6.2% SS tax drops off.
Thanks guys. I'm only talking about the very last dollar, so effective rate and itemizing is irrelevant right?

So for example, I want to know how much a $1 raise or $1 of overtime gets me.

Looks like I was right :shock:. For every dollar you make in that bracket, you get to keep 54 cents. That's crazy.

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Re: California - clarification on taxes

Post by mac808 » Wed Aug 16, 2017 6:32 am

JustinR wrote:
Wed Aug 16, 2017 6:11 am
Thanks guys. I'm only talking about the very last dollar, so effective rate and itemizing is irrelevant right?
Effective rate wouldn't be relevant, but itemizing would lower the marginal rate by 2.6% (.28 [marginal fed rate] * .093 [marginal state rate] = ~ .026). Marginal rate meaning the % tax paid on "the very last dollar".

So, if you itemize:

between $91,900 and $127,200 your marginal rate is 43.3%
between $127,200 and $191,650 your marginal rate is 37.1%

& if you do NOT itemize:

between $91,900 and $127,200 your marginal rate is 45.9% (ouch)
between $127,200 and $191,650 your marginal rate is 39.7%

There may be other quirks like ACA subsidies or Roth IRA income phase outs that would further dis-incentivize someone from pushing their income up from ~ $90k into the low $100k range (assuming that time and sacrifices were required and it wasn't just free moola).

JustinR
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Re: California - clarification on taxes

Post by JustinR » Wed Aug 16, 2017 6:44 am

mac808 wrote:
Wed Aug 16, 2017 6:32 am
JustinR wrote:
Wed Aug 16, 2017 6:11 am
Thanks guys. I'm only talking about the very last dollar, so effective rate and itemizing is irrelevant right?
Effective rate wouldn't be relevant, but itemizing would lower the marginal rate by 2.6% (.28 [marginal fed rate] * .093 [marginal state rate] = ~ .026). Marginal rate meaning the % tax paid on "the very last dollar".

So, if you itemize:

between $91,900 and $127,200 your marginal rate is 43.3%
between $127,200 and $191,650 your marginal rate is 37.1%

& if you do NOT itemize:

between $91,900 and $127,200 your marginal rate is 45.9% (ouch)
between $127,200 and $191,650 your marginal rate is 39.7%

There may be other quirks like ACA subsidies or Roth IRA income phase outs that would further dis-incentivize someone from pushing their income up from ~ $90k into the low $100k range (assuming that time and sacrifices were required and it wasn't just free moola).
Ohhh I did not know that. Thank you for breaking down the math for me!

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Re: California - clarification on taxes

Post by indexfundfan » Wed Aug 16, 2017 7:35 am

Are you paying AMT? If you are, your marginal federal tax rate might be 32.5% instead of 28% because of the AMT phase-out exemption.
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pasadena
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Re: California - clarification on taxes

Post by pasadena » Wed Aug 16, 2017 8:14 am

JustinR wrote:
Wed Aug 16, 2017 4:27 am
Fed: 28%
State: 9.3%
SDI: 0.9%
Social Security Tax: 6.2%
Medicare Tax: 1.5%
-------
45.9% in taxes?
For what it's worth, Medicare tax rate is 1.45%, not 1.5%.

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Re: California - clarification on taxes

Post by JW-Retired » Wed Aug 16, 2017 8:15 am

We could add that at higher incomes you will start getting into phaseouts of itemized deductions and personal exemptions. Taxes, interest, and charitable contribution deductions are effected. This starts at $311k AGI for married joint filers. I think this puts high bracket couples in CA at just about a 49% Fed + state marginal rate (39.6 + 9.3). Possibly somewhat higher while the phaseout is still going on. Tax software could tell you exactly what it is for your own case.

CA keeps going on up to 12.3% for a bit over a million dollar income.
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stan1
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Re: California - clarification on taxes

Post by stan1 » Wed Aug 16, 2017 8:22 am

Not mentioned yet are Traditional 401K contributions that help a lot in the 28% federal/9.3% state tax bracket.

LarryAllen
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Re: California - clarification on taxes

Post by LarryAllen » Wed Aug 16, 2017 8:42 am

I try to just focus on making more money to overcome the tax burden. Not saying I totally ignore the taxes but it's more pleasant to just focus on income and figure out a way to make more of it. Works for me anyway.

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Re: California - clarification on taxes

Post by Raybo » Wed Aug 16, 2017 9:47 am

While this is unrelated to the OP's question, California doesn't tax Social Security payments. This eases the tax burden on the retired.
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Re: California - clarification on taxes

Post by Cyclesafe » Wed Aug 16, 2017 10:04 am

As one "progresses" within the 28% federal bracket, first one hits AMT (as mentioned), then the NIIT after AGI of $250k.

Lots of moving parts. Better to simulate your own situation using tax software.

This penalty for earning that extra dollar, plus the time and expense of dressing for and commuting to an office, encouraged me to retire as soon as I made my number.

davegreen10
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Re: California - clarification on taxes

Post by davegreen10 » Wed Aug 16, 2017 10:11 am

CA SDI caps out at $$110,902 for 2017 so you can subtract the .9% from your marginal rate as well

TheAncientOne
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Re: California - clarification on taxes

Post by TheAncientOne » Wed Aug 16, 2017 10:37 am

Your numbers are exactly correct. I do my daughter's taxes as well as ours and last year, she had 65K in taxable income (after standard deduction, one personal exemption and 401K contribution). At that august level of income, she had marginal taxes of 25% federal and 9.3% state plus the usual FICA/Medicare/SDI taxes as well.

Yes, there are limits on Social Security and SDI taxes but as those are reached, you're likely to soon be getting higher tax rates on both federal and state income taxes. Unless you own a house or are extremely generous in your charitable donations, you won't be itemizing deductions until you have a substantially higher income. If you make a few hundred thousand dollars in CA you very likely will be paying AMT, meaning that you don't get to deduct all those state taxes from your federal return.

Two points. First the decision to live in CA should be viewed as a form of luxury consumption if you make even just a solid income. Second, CA residents should spend more effort finding ways to reduce spending (which must be paid for with after tax dollars) and less on increasing income, over 40% of which must be paid in tax. Or at least max out on all tax advantaged investments that can be withdrawn later on once you retire to a lower tax state.

By the way, CA income tax no longer allows for any reduction in tax rate for capital gains.

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Re: California - clarification on taxes

Post by Raybo » Wed Aug 16, 2017 11:38 am

TheAncientOne wrote:
Wed Aug 16, 2017 10:37 am
the decision to live in CA should be viewed as a form of luxury consumption if you make even just a solid income.
If living in California is "luxury consumption," what states are "regular consumption" and which are "low-cost consumption?" Is this based on taxes alone or do you have some other criteria in mind?
No matter how long the hill, if you keep pedaling you'll eventually get up to the top.

CFM300
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Re: California - clarification on taxes

Post by CFM300 » Wed Aug 16, 2017 12:21 pm

JustinR wrote:
Wed Aug 16, 2017 6:11 am
Looks like I was right :shock:. For every dollar you make in that bracket, you get to keep 54 cents. That's crazy.
Enjoy the weather! :D

pasadena
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Re: California - clarification on taxes

Post by pasadena » Wed Aug 16, 2017 12:40 pm

TheAncientOne wrote:
Wed Aug 16, 2017 10:37 am

Yes, there are limits on Social Security and SDI taxes but as those are reached, you're likely to soon be getting higher tax rates on both federal and state income taxes. Unless you own a house or are extremely generous in your charitable donations, you won't be itemizing deductions until you have a substantially higher income.
For a single person, the next brackets for both Fed and CA are substantially higher than the SS tax limit. Fed 33% bracket is ~66K above the SS tax limit, and CA 10.3% bracket starts 150k higher than the SDI limit.

I have an income that is above the SS tax limit for 2017 (the limit increased quite a lot this year) by ~20k with bonus and overtime, and I do itemize, even though I rent, and I give/tithe almost nothing.

hicabob
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Re: California - clarification on taxes

Post by hicabob » Wed Aug 16, 2017 12:44 pm

At least we get a nice federal tax deduction ..... currently :( .
For those making less than the top quintile earners do there are a few higher tax states.

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Re: California - clarification on taxes

Post by IMO » Wed Aug 16, 2017 12:50 pm

JustinR wrote:
Wed Aug 16, 2017 4:27 am
I'm trying to get something straight.

Say I'm in the 28% federal marginal bracket. I'm in California. Does this mean, that for the last dollar I make from my employer, I lose this in taxes:

Fed: 28%
State: 9.3%
SDI: 0.9%
Social Security Tax: 6.2%
Medicare Tax: 1.5%
-------
45.9% in taxes?


So for every extra dollar I make, I actually only made 54 cents? Is this correct?

Don't worry about the exact income value. Assume the above marginal tax values.

Edit: So if you itemize you can subtract 28% * 9.3% = 2.6%, which means your tax is 43.3%.
As the great Ed McMann would say, "You are Correct!"

But keep in mind, there are millions upon millions of Californians that are not paying that 45.9% taxes. The government and socially supported programs just don't magically pay for themselves.

If you buy a home in California for the long term, and they don't make any changes regarding Prop 13 (or any other tax related laws), AND you stay LONG term and then retire in California, history has shown that the tax burden/expenses make California a reasonable state to retire (but not to work).

pasadena
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Re: California - clarification on taxes

Post by pasadena » Wed Aug 16, 2017 12:59 pm

hicabob wrote:
Wed Aug 16, 2017 12:44 pm
At least we get a nice federal tax deduction ..... currently :( .
For those making less than the top quintile earners do there are a few higher tax states.
Ah. I made that calculation for a friend who was arguing that he would never move to CA because of income tax. He lives in Missouri, which has a top rate of 6%.

But it really is a flat rate of 6%, as there's only 2 brackets, and the 6% one starts at $9,000. So with my paycheck here, I have a marginal tax rate of 9.3%, and effective tax rate of ~7.2%, plus 0.9% SDI. In Saint Louis, where my friend lives, my effective tax rate would be 5.999% + 1% city tax.

The only difference is SDI, and a slightly lower sales tax.

I'll take the palm trees, thank you.

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Re: California - clarification on taxes

Post by LarryAllen » Wed Aug 16, 2017 1:13 pm

There are a ton of different taxes to consider. As mentioned prop 13 keeps property taxes VERY low for Californians who own their home a long time. Sales tax is similar to most other states. However, CA does not have a state "estate" (or death) tax as many states do. In fact, many states kick in at only $1m of assets which is a pretty easy number to exceed. If you want a crazy law look at Oregon's estate tax. If you own real property (a vacation home for example) in Oregon you can be taxed at death, even if you live out of state, and they look at your non-Oregon assets to determine if you exceed $1m and then tax you on the property in Oregon. CRAZY! So, ya no sales tax in Oregon but that estate tax could be a shock to many. Lastly, our utility bills in CA are low as we don't have to blast our heat for a long winter nor our AC for a hot/humid summer. All told CA is a pretty decent place to live. It's not perfect but it's not so bad.

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Re: California - clarification on taxes

Post by DVMResident » Wed Aug 16, 2017 1:33 pm

Edit: So if you itemize you can subtract 28% * 9.3% = 2.6%, which means your tax is 43.3%.
The itemize deduction is only worth it's benefit above the "freebie" standard deduction. A lot arithmetic hoops to jump through to get this answer made more complicated by phaseouts and other arcane rules. I'll echo the poster above: easiest way to answer by doing a dummy tax return and then add $1.

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Re: California - clarification on taxes

Post by celia » Wed Aug 16, 2017 1:39 pm

JustinR wrote:
Wed Aug 16, 2017 4:27 am
Say I'm in the 28% federal marginal bracket. I'm in California. Does this mean, that for the last dollar I make from my employer, I lose this in taxes:

Fed: 28%
State: 9.3%
It isn't just your wages that are taxed like this, but also most of the other income on your tax return, although some things like Qualified Dividends and LTC gains are taxed more favorably.

CFM300 wrote:
Wed Aug 16, 2017 12:21 pm
JustinR wrote:
Wed Aug 16, 2017 6:11 am
Looks like I was right :shock:. For every dollar you make in that bracket, you get to keep 54 cents. That's crazy.
Enjoy the weather! :D
And the weather is priceless!

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Re: California - clarification on taxes

Post by surfstar » Wed Aug 16, 2017 1:50 pm

CFM300 wrote:
Wed Aug 16, 2017 12:21 pm
JustinR wrote:
Wed Aug 16, 2017 6:11 am
Looks like I was right :shock:. For every dollar you make in that bracket, you get to keep 54 cents. That's crazy.
Enjoy the weather! :D
WE DO!

Also our utilities are quite low, as its never too hot or too cold :sharebeer

I wouldn't advise against making more $ because of CA taxes, but I sure wouldn't sign up for OT, unless you like money more than time.

CFM300
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Re: California - clarification on taxes

Post by CFM300 » Wed Aug 16, 2017 4:18 pm

celia wrote:
Wed Aug 16, 2017 1:39 pm
And the weather is priceless!
Agree, 100%.

It's mid-August and I've been working at home with the windows open all day.

About to go for a run. It's currently sunny and 69 degrees. :D

JustinR
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Re: California - clarification on taxes

Post by JustinR » Wed Aug 16, 2017 4:45 pm

DVMResident wrote:
Wed Aug 16, 2017 1:33 pm
Edit: So if you itemize you can subtract 28% * 9.3% = 2.6%, which means your tax is 43.3%.
The itemize deduction is only worth it's benefit above the "freebie" standard deduction. A lot arithmetic hoops to jump through to get this answer made more complicated by phaseouts and other arcane rules. I'll echo the poster above: easiest way to answer by doing a dummy tax return and then add $1.
Hmm I can't wrap my head around how I would calculate the true value of the itemized state tax deduction then. I imagine subtracting the standard deduction and then dividing by something?

JustinR
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Re: California - clarification on taxes

Post by JustinR » Wed Aug 16, 2017 4:48 pm

celia wrote:
Wed Aug 16, 2017 1:39 pm
JustinR wrote:
Wed Aug 16, 2017 4:27 am
Say I'm in the 28% federal marginal bracket. I'm in California. Does this mean, that for the last dollar I make from my employer, I lose this in taxes:

Fed: 28%
State: 9.3%
It isn't just your wages that are taxed like this, but also most of the other income on your tax return, although some things like Qualified Dividends and LTC gains are taxed more favorably.
Yea, i specified wages because other ordinary income doesn't get taxed with the SDI and Fica I believe.

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Re: California - clarification on taxes

Post by Ron Ronnerson » Wed Aug 16, 2017 6:48 pm

TheAncientOne wrote:
Wed Aug 16, 2017 10:37 am
Two points. First the decision to live in CA should be viewed as a form of luxury consumption if you make even just a solid income. Second, CA residents should spend more effort finding ways to reduce spending (which must be paid for with after tax dollars) and less on increasing income, over 40% of which must be paid in tax. Or at least max out on all tax advantaged investments that can be withdrawn later on once you retire to a lower tax state.

By the way, CA income tax no longer allows for any reduction in tax rate for capital gains.
I do very much agree with the second point. Upon realizing how taxes work, my strategy has been to focus most of our energy on trying to keep our expenses low rather than our income high. We are at the very top of the 15% tax bracket. Any additional money would be taxed at 25%. My California state tax rate is 8%. I contribute 10.25% toward a pension. Our AGI is at $110k. Any additional income would mean we'd be in the phaseout for the child tax credit (so effectively a 5% tax increase). I pay 1.45% for medicare as well. All this adds up to 49.7%. I just don't wish to pay that.

Since we're saving enough to meet our financial goals and since we'd only see about half of any additional money we earned, we've chosen just not to earn the additional money. Any raises we happen to get are directed into retirement accounts. This means my wife works 30 hours per week but no more (enough to qualify for benefits). I teach full time but don't tutor or teach summer school. This results in having a lot of time off together as a family.

As for the first point, I sort of agree. Yes, it is more expensive in California. However, the climate in many areas poses a very different form of tax on people; it's on their bodies and moods rather than their pocketbooks. That's harder to quantify but, as they say, there is no free lunch.

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Re: California - clarification on taxes

Post by grabiner » Wed Aug 16, 2017 8:07 pm

One additional issue: the 6.2% Social Security tax is forced retirement savings, not a loss. The amount you get out of Social Security depends on the amount you put in, and with your employer paying half, you actually get a decent risk-free return.

The Medicare tax is a loss to you, as you either qualify for Medicare or you don't; you do not get more Medicare benefits as a result of paying more Medicare tax.
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Re: California - clarification on taxes

Post by DVMResident » Wed Aug 16, 2017 9:20 pm

JustinR wrote:
Wed Aug 16, 2017 4:45 pm
DVMResident wrote:
Wed Aug 16, 2017 1:33 pm
Edit: So if you itemize you can subtract 28% * 9.3% = 2.6%, which means your tax is 43.3%.
The itemize deduction is only worth it's benefit above the "freebie" standard deduction. A lot arithmetic hoops to jump through to get this answer made more complicated by phaseouts and other arcane rules. I'll echo the poster above: easiest way to answer by doing a dummy tax return and then add $1.
Hmm I can't wrap my head around how I would calculate the true value of the itemized state tax deduction then. I imagine subtracting the standard deduction and then dividing by something?
If you itemize $20.6k and your standard deduction is $12.6k, your itemized deduction only gains you $8k in net deductions. At a marginal rate of 37.3% (28% + 9.3%), saved you $2,984. You itemized $20k to lower your tax bill by $2,984 over what a standard deduction would have been.

(Actually, it's a little more complicated, but that's the idea).

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Re: California - clarification on taxes

Post by N10sive » Wed Aug 16, 2017 9:33 pm

That's your marginal tax rate. Your effective tax rate should be lower.

Anyways that's exactly what I saw when I received a significant raise and decided to put the full 401k max every year so I wouldnt be getting only 56 cents to the dollar.

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Re: California - clarification on taxes

Post by JustinR » Wed Aug 16, 2017 10:29 pm

DVMResident wrote:
Wed Aug 16, 2017 9:20 pm
JustinR wrote:
Wed Aug 16, 2017 4:45 pm
DVMResident wrote:
Wed Aug 16, 2017 1:33 pm
Edit: So if you itemize you can subtract 28% * 9.3% = 2.6%, which means your tax is 43.3%.
The itemize deduction is only worth it's benefit above the "freebie" standard deduction. A lot arithmetic hoops to jump through to get this answer made more complicated by phaseouts and other arcane rules. I'll echo the poster above: easiest way to answer by doing a dummy tax return and then add $1.
Hmm I can't wrap my head around how I would calculate the true value of the itemized state tax deduction then. I imagine subtracting the standard deduction and then dividing by something?
If you itemize $20.6k and your standard deduction is $12.6k, your itemized deduction only gains you $8k in net deductions. At a marginal rate of 37.3% (28% + 9.3%), saved you $2,984. You itemized $20k to lower your tax bill by $2,984 over what a standard deduction would have been.

(Actually, it's a little more complicated, but that's the idea).
Thank you. So the only way to know how much in tax you're saving from itemizing is if you actually plug in the numbers for your actual taxes? There's no easy percentage you can use (like -2.3% in taxes)?


N10sive wrote:
Wed Aug 16, 2017 9:33 pm
That's your marginal tax rate. Your effective tax rate should be lower.

Anyways that's exactly what I saw when I received a significant raise and decided to put the full 401k max every year so I wouldnt be getting only 56 cents to the dollar.
Effective tax rate doesn't matter when you're trying to decide whether to work $1 of overtime though. Or receiving $1 more in interest.


grabiner wrote:
Wed Aug 16, 2017 8:07 pm
One additional issue: the 6.2% Social Security tax is forced retirement savings, not a loss. The amount you get out of Social Security depends on the amount you put in, and with your employer paying half, you actually get a decent risk-free return.

The Medicare tax is a loss to you, as you either qualify for Medicare or you don't; you do not get more Medicare benefits as a result of paying more Medicare tax.
Wait, you get more Social Security the more you contribute? So if you do $1 more of overtime, you'd get more from SS then if you had not done the overtime?

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Re: California - clarification on taxes

Post by richardglm » Wed Aug 16, 2017 11:28 pm

JustinR wrote:
Wed Aug 16, 2017 10:29 pm
Wait, you get more Social Security the more you contribute? So if you do $1 more of overtime, you'd get more from SS then if you had not done the overtime?
Yes. Your highest 35 years of subject wages (effectively, the amount of FICA tax you paid) determines (along with many other adjustment factors) the benefit you get in the end. Someone who maxed out social security wages for 35 years would have one of the highest possible benefits.

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Re: California - clarification on taxes

Post by Slacker » Thu Aug 17, 2017 12:35 am

JustinR wrote:
Wed Aug 16, 2017 10:29 pm

Wait, you get more Social Security the more you contribute? So if you do $1 more of overtime, you'd get more from SS then if you had not done the overtime?
Declining returns though.

If you hit $127,000+ per year for 35 years, you won't get anything more into social security by earning more. Also the money paid into social security at a very high income is worth less in payments received compared to the low wage dollars you put in.

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Re: California - clarification on taxes

Post by indexfundfan » Thu Aug 17, 2017 6:23 am

Recent article on the "Impact Of Early Retirement On Projected Social Security Benefits"

https://www.kitces.com/blog/calculating ... etirement/

As someone pointed out, you generally get declining returns with the additional years you work. See

https://www.ssa.gov/oact/cola/bendpoints.html

The returns are the best up to the first "bend" point. Returns are much lower after the second "bend" point.
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Re: California - clarification on taxes

Post by Artsdoctor » Thu Aug 17, 2017 1:21 pm

Justin,

No one lives in California because of low taxes. If you're going to live here, you need to learn California tax law. People tend to fixate on the federal tax code but when you're living in a state with relatively high income tax, it behooves you to learn about the state's tax laws. You can do it online but I've found that it's very helpful to use your tax software as well.

Your 28% maginal tax bracket is quite large. If you're at the higher end of it, you're probably paying enough state income tax to push you into the AMT although you might not fully know this unless you play with software. State income tax cannot be deducted from your federal return while you're in the AMT (nor can real estate tax).

There are plenty of idiosyncrasies associated with CA income tax so just learn as much as you can. On a brighter note, if you're going to become a tax-loss harvester, CA allows you to carryover your capital losses from year to year . . . And if you do decide to stay in your house for a long time, your real estate taxes are far lower than many people's outside of CA. And those CA municipal bonds become quite valuable to you when comparing other types on income . . .

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