It's been 40 months since my first surgery and I really want to go back to work. My pain is bearable with help from ocassional pain killers. I just can't walk a quarter mile, walk on uneven ground, or climb stairs with style and grace.
Make the following aassumptions:
- My gross SS income is $25K;
- Susan's income is 50K; and
- Maryland tax rate is 7.95%.
Ignoring the personal costs of going to work, what is the break-even gross income I need to replace the $25K? I can figure the rest out.
My off-the-wall guess is the first $46K is replacement income.
Maybe you need some more Jack Daniels "Special Blend" to speed the healing process:)
Best regards,
Jim Hayden EA - Grand Rapids, MI
Moderator: Actually it was Jack Daniels Single Barrel. It was so good that I often took it out in an eye dropper so it would last longer. You have a two liters of Mead coming from me. I just have not made anything good enough yet to send you.
Run some numbers and give me an idea of a replacement salary. I do not live far from the Social Security Administration and with my professional credentals, they damn well should hire me to get me off disability. I'll have to tell them that I have to take pain killers during the day.
Dick: Having been a MD resident for 17 years -- ending about 17 years ago with a move to FL -- I was intrigued by your quote of 7.95% for the MD tax rate. In my day, the "state" rate was 5% (technically, only after the first $4K). But that was just the beginning, because your _county_ then added on -- frequently at 50% of the state rate. So, in Montgomery County, where I lived, the total tax came to
7.5%. How on earth did that convert to _7.95_? (Just simple curiosity.) [Also, having driven around 695 and often joined it from I-70 as a convenient route from Montgomery County, heading for friends or relatives in Southeastern PA, I'm very familiar with the intersection of I-70 into I-695, with the easy "mistake" of keeping left too long, and discovering you're on "Social Security" Blvd. Is that your general neighborhood?] As to your question, my limited offer is to point out that your $25K from SS is already 85% taxed, under federal rules (and my recollection is the AGI was transferred directly onto the MD forms) ... so except for that 15% differential, your "replacement" requirements would not be substantially different (17.65% above current would equal the 15% "tax-free" -- only requiring $29,400 to balance the gross income). Therefore, your principal "break-even" considerations should be the _expense of working_. Clothing, transport, purchased lunch, etc. will add up to a lot more than that $4,400. Bill
Dick, it's $29,620 taking into consideration taxation of current SS benefits, SS tax on your new salary, no children, no itemizing, not over age 65, and 2006 rates. Ed
That's the amount taking into consideration only the Maryland tax. It doesn't take into consideration the additional tax on the joint return. I believe the marginal rate for both $75,000 and $50,000 is 25%. Assuming that's all correct, the figure would be $37,285, or just a bit less if the state tax is deductible. Of course, that's still just an estimate based on those as final taxable figures. Stu
With a standard deduction for MFJ and two personal exemptions, the marginal tax rate is only 15%. Like the other posters, I also get a number very close to $30,000 including payroll tax and state tax, using 2005 law.
No, Stu. He's almost entirely in the 15% tax bracket. He currrently has 75,000 gross income, taxable income of
54,350, US tax of 7,398 and MD tax of 5,300 for net takehome of about $63,280 )(minus wifes' SS). If he takes $29,130 salary (total income $79,130) he'll have 62,230 taxable income for US Tax of 8673 and MD tax of 4947 and 2,228 SS on his 29,150 salary for a net of bout 63,280 In other words at $29,130 salary instead of $25,000 SS his "take-home" will be the same. ed.
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