Cedar said:
What app is he using here?
Looks like it’s from ADP’s portal.
Is this from a tax calculator?
Don’t forget his two ‘businesses’ probably losing $100k a year. Classic tax hack.
I didn’t mention the Social Security cap in the title, but I still think he’s underpaying for federal.
Alton said:
I didn’t mention the Social Security cap in the title, but I still think he’s underpaying for federal.
Could be a lot of deductions we’re not seeing. I have a mortgage, donate to multiple charities, max out 401k, HSA, and other benefits. I usually owe very little because my taxable income ends up being a lot lower than gross.
Alton said:
I didn’t mention the Social Security cap in the title, but I still think he’s underpaying for federal.
He’ll probably pay about $40-50k in federal taxes, plus another $14k for FICA.
Alton said:
@Emory
Assuming he’s single with no extra deductions, he’s short by about $6k.
That’s hardly a huge deal in this situation. He probably has a mortgage and itemized deductions anyway.
With about $43k federal and $14k for FICA, he’d be on target if he put in around $19k for his 401k.
Zoren said:
With about $43k federal and $14k for FICA, he’d be on target if he put in around $19k for his 401k.
When I ran it as single with no other factors, I still got a shortfall of about $6k.
@Alton
I figured he maxed out 401k and included any company match. But it’s hard to say if he’s single or married.
Zoren said:
@Alton
I figured he maxed out 401k and included any company match. But it’s hard to say if he’s single or married.
Same here, used the full amount for employee. It’ll vary by state too.
Lots of things can lower taxable income… maxing out 401k, itemizing mortgage interest, high medical expenses, property taxes, stock losses, donations, or tax credits for things like solar panels. It all adds up and is legit. But yeah, not everyone’s making enough to take advantage of this.
If he has a 6% mortgage, he could be paying close to $50k in deductible interest.