You should make use of a “Take-Home-Paycheck Calculator with the thrust of estimating the paycheck you bring home after taxes and deductions from your salary. This calculator gives results based on both 2014 and 2015 tax brackets.
In the United States, the paycheck after tax and deductions is the “actual income” you will bring home. If you are worker, your boss will withhold your tax and deductions from your paycheck. If you are self-employed, you are liable to submitting your taxes either every quarter or every year, and paying for your own benefits.
In the US income taxes usually contain the following:
Federal Income Tax—this is a progressive income tax, which means the tax rate boosts as your income grows. Presently, the federal income tax rate tops out at 39.6%.
State Income Tax—Seven states enforce no income tax and these are Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming. In the states that do impose an income tax, the lowest maximum rate is 3.07%, in Pennsylvania. The highest maximum rate is 13.3%, in California. Most states have a progressive income tax.
Local/City/Municipal Income Tax—some cities such as New York City, Philadelphia enforces local tax. The state and local taxes are usually deductible for federal income tax.
Payroll Tax—this refers to Social Security tax and Medicare tax. The Social Security tax rate is 12.4% up to an annual maximum ($117,000 for 2014, $118,500 for 2015). Based on the “American Taxpayer Relief Act of 2012″, the Medicare tax rate is 2.9% up to $200,000 for singles and $250,000 if married and filed jointly. After that, the Medicare tax rate is 3.8% with no up limit. If you are self-employed, you are responsible for your full payroll taxes.
If you are an employee, you and your employer share your payroll taxes. Your Social Security tax rate is 6.2% (4.2% for 2011 and 2012) and your Medicare tax rate is 1.45% if your income is below $200,000 (single) or $250,000 (married and filed jointly). If your income is higher, your Medicare tax rate is 2.35% for the higher portion. Your employer will pay a 6.2% of Social Security tax up to the annual maximum and 1.45% of Medicare tax with no up limit for you.
Unemployment Tax—if you are a worker, your company will pay your unemployment taxes with no deduction from your paycheck. If you are self-employed, you do not need to pay unemployment taxes. For that reason, you are not qualified for unemployment benefits upon the cessation of your self-employment status.
In addition to taxes, there may be deductions from your paycheck for a variety of reasons – most commonly, employer-sponsored retirement savings and the shared cost of benefits. In general, employer-sponsored retirement savings refers to 401K plan. Many companies provide 401K plans and “match” your savings. Some companies provide pension benefits. Pension benefits should be fully covered by the employer with no deduction from your paycheck. The shared cost of benefits refers to the partial benefit cost that many employers require employees to share, such as medical insurance, dental insurance, life insurance, and disability insurance. Medical spending plans and 529 college savings plans are other common deductions. Self-employed people are responsible for paying all benefit costs themselves. Most of these benefit costs are tax-deductible.