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  • Personal Finance Help

    Well mainly I need some assistance in finding out how much is taken out of each paycheck in taxes... I looked around at some websites but were no help, so I decided to come here. (BTW, I'm 18, Senior in high school and this is my first job, so I'm new to all this)

    I got my first paycheck today. The pay period is every Friday, and I get paid every Friday for the previous week's work. I worked one day last week @ $8/hour for 5.5 hours. I made $44 gross, $39.21 net. It says total withholdings is $4.69. Is there a way to calculate how much I'm paying in taxes percentage wise? I work 3 days a week every week, so by multiplying $4.49 by 3 I'll be paying $14.07 every week in taxes (Right? IDK if that's how it works >.<). How much would that come out to be percentage wise? I feel I should know this by being in an AP Calculus class -.- haha.

    The only deductions I have is FICA Social Security, FICA Med, and State Withholding. It says Federal Withholding on their but I didn't pay anything for that, and I'm not sure if I will have to pay for that in the near future or not. (Also I work in Lansing, IL. I don't know if that information is relevant to this question or not.)

    Also an example would be: I'm doing 17.5 hours this week @ $8/hour which comes out to $140 at the end of the week. How much am I going to be paying from that in taxes? If it's what my reasoning is above, then it'll be $126.93 on my next paycheck. Correct or not?

    Thanks for reading and helping me out!! :)

  • #2
    Re: Personal Finance Help

    Taxes are taken as a percentage of your gross income. The percentage taken can vary from area to area, so you'll need to check out some stuff locally to figure that out. If federal taxes are not being taken out then you may want to look into that as if you should be paying them and your not then you will have to pay them in one lump sum come tax time next year.

    Any financial questions like these are a good thing to discuss with your parents. As they should know the basic answers that you are looking for simply from experience.

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    • #3
      Re: Personal Finance Help

      Another option would be to talk to your boss... He/she might not have the best answer but I'm sure that they would be willing to help if possible. If you happen to work for a larger company, you should be able to talk to someone in the human resource department as well. It is HR's job to assist in issues like this (when reasonable) and should hopefully be able to explain things. That or since you are still in high school I'm sure that there is at least one teacher (civics/government, or economics) that would be willing to offer assistance.

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      • #4
        Re: Personal Finance Help

        Alright, thanks guys. I plan to go tomorrow and talk with my boss and if that doesn't help I'll go talk to my AP Economics teacher, she should know the rules and what not. And I definitely need to get that fed tax checked out, because I don't wanna be stuck with a huge bill at the end of the year...

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        • #5
          Re: Personal Finance Help

          If you're working directly for an employer (as opposed to being a contractor), you should have filled out a W-4 form, which tells your employer how much of your paycheck to withhold for taxes. Add "W-4 form" to your Google searches and I bet you'll find some useful info...
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          • #6
            Re: Personal Finance Help

            Between state, local and federal taxes I loose about 29-35% of my gross wages depending on how much if any overtime I have on a given 2 week pay period. It's quite depressing especially when you get a bonus check and get all excited then you look at the net pay and it's VERY different from the large gross.

            Taxes suck.


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            • #7
              Re: Personal Finance Help

              Originally posted by Vaudou View Post
              And I definitely need to get that fed tax checked out, because I don't wanna be stuck with a huge bill at the end of the year...
              The reason there's withholding is because most people don't save. If you can show the discipline to save the money that would have been withheld, it'll collect interest, and then at the end of the year you pay the principal as taxes and keep the interest. Net winner: You. But the government knows people don't show that discipline, so it fines anyone who attempts it (by fining for "under-withholding"). The only reason you should worry is because of that fine. Otherwise you could just tuck the money away in a savings account and be ahead the amount of the interest at the end of the year.

              Most people love getting a huge refund at the end of the year, thinking it's a big gift from the government. They don't seem to get that it was their money for the last 12 months, and they let the government sit on it all that time, not earning any interest. I try to set my withholding as low as possible, so I'll owe as much as I legally can at the end of the term.
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