My niece just took her first job making minimum wage. (I think she makes 6.50) Single. Using only herself as dependant. What would be her hourly wage work out to after taxes? (assuming 40hr x 52weeks)
40 x 52 x $6.50 = $13,520
Standard deduction (for 2007) is $5,350, personal exemption is $3,400, for a total of $8,750, leaving taxable income is $4,470. The income tax on that will be $447.
She'll also pay $13,250 x 7.65% = $1,014 in SS and Medicare taxes.
She makes too much to be eligible for the earned income tax credit.
-- Rich Carreiro snipped-for-privacy@animato.arlington.ma.us
I get $1034 for social security and $747 for income tax.
Using your assumptions, her annual income will be $13,520. For 2006, the standard deduction is $5150 for a single person and the personal exemption is $3300, so her taxable income is $5070 and her tax would be about $507. That makes her hourly wage after federal income tax of $6.26. If you include SS/Medicare, her take-home pay would be $5.76/ hour, assuming no state taxes taken out. The actual number will be someone different because she didn't start working Jan. 1, and the deduction/exemption numbers will increase for 2007. Plus, minimum wage is $5.15 right now, so you might have an incorrect number for income.
Running this through Turbo Tax, I figured that her federal income tax liability would be $508 (based on gross income of $13,520, single, no dependents, standard deduction, and not being claimed by anyone else as a dependent). Her total hours would be 40 x 52 = 2,080, so her hourly rate after federal income taxes would be about $6.255. However, she would also have to pay Social Security tax at
6.2%, and Medicare tax at 1.45%, of her gross. So her TOTAL federal tax liability would be $838.24 Soc Sec + $196.04 Medicare + $508 income tax = $1542.28, and her hourly rate after all federal taxes would be about $5.758. And that doesn't take state income taxes, state disability insurance, city income taxes, etc. into account. Katie in San Diego
$5.76 after federal income tax, Social Security, and Medicare taxes, with no state tax. That's based on a lot of assumptions, of course. Bob Sandler
There isn't enough information to answer.
Age, living arrangements, etc. all come into play. Also, you are effectively asking about a 2007 tax return. The laws may change...
Thanks to everyone that answered.
I just wanted to be able to tell her something like......if you keep putting those ring tones on your cell phone, you will have to work an extra 3 hours just to be able to. I was thinking her tax would be more than estimated 0.75/hr you guys came up with. I am glad to know it isn't.
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