life’s a beach…. unless…it isn’t… calculating federal & state taxes how much do you...
TRANSCRIPT
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Life’s a Beach…
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Unless…it isn’t…
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Calculating Federal & State Taxes• How much do you make a year?—This is your gross
income Ex: $45,000• Divide it by 12 months—This is your gross monthly
income $3750• Multiply your gross monthly income by your federal tax
bracket, then subtract this amount from your gross monthly income.
$3750 * 25% = $937.50$3750- $937.50 = $2812.50• Multiply your gross monthly income by your state tax
bracket, then subtract this amount from your gross monthly income.
$3750 * 6% = $225.00$3750- $937.50 = $2812.50 (after Fed. Taxes) $2812.50 - $225.00 = $2587.50
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Example…
Income: $100,000
Wages & bonus: $8333.33 per month
Fed income tax: 2083.33 per month
State income tax: 499.99 per month
Social security: 1274.99 per month
Income tax subtotal: $3858.31
Spendable income: $4475.02
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Calculating Social Security
• Multiply your gross monthly income by Social Security and Medicare expenses, then subtract this amount from your gross monthly income.
$3750 * 15.3% = $573.75
$2587.50 (after Fed & State taxes have been
deducted) - $573.75 = $2013.75* Complete the same process for your spouse…
add them together and that is your NET monthly income (take home pay).
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Property Taxes…• For the purposes of this exercise, everyone that
owns a home will calculate property taxes in the following way…(we will assume that the tax assessors are giving you a break!)
Purchase price of the home ex. $225,000
Multiple by estimated value 80%
$225,000 * 80% = $180,000
$180,000 (est. value) * 2% = $3,600 (this is the amount that you will pay for property taxes)
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Homeowners & auto insuranceType I Type II Type III
Basis coverage---the min. amount the law requires
Moderate coverage—you will be provided for in the event that nothing major happens to you
Best coverage—Grandma’s nightgown—you are covered for EVERYTHING!!
1 % * value of car & house = insurance rates divide by 12 to get the monthly rate
2 % * value of car & house = insurance rates divide by 12 to get the monthly rate
3 % * value of car & house = insurance rates divide by 12 to get the monthly rate
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Home repairs/HOA dues etc…
• This is optional…but if you don’t pay them forward you may, or may not suffer for it later…
• Calculate $200.00
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Utilities—not an exact science
• Electric: Calculate 1% of your house purchase price to determine your electric rate
• Natural gas: Calculate 1% of your house purchase price to determine your electric rate
• Water/sewer: family of 4+ = $75.00 per mo family of 3 = $65.00
family of 2 = $55.00• Telephone: landline only (basic) $20.00• Telephone: 2 cell phones (basic) $85.00• Telephone: landline + 2 cell (basic) $100.00• Telephone: landline + 2 cell (deluxe) $200.00• Telephone: landline + 4 cell (deluxe) $300.00
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Optional expenses
• Trash pickup: $13.50 per mo
• Internet expense: $30.00 per mo
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FoodGroceries– Family of 4 (small kids) $350.00 per mo
• Diapers & formula (babies-2 years) add $150.00
– Family of 4+ (big kids/teens) $600.00 per mo– Family of 3 $300-350– Family of 2 $250.00Eating out– Lunch $200.00 (fast food for 2 adults)– Lunch $430.00 (sit down meals for 2 adults)– Lunch for school aged $30.00 per childSnacks– 1 coke + 1 snack per day for 4 individuals = $ 40.00
per week
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What are you going to do about childcare?
• School aged kids (ages 6-11) ASP $6 per day per child
• Childcare (Basic) $250.00 per week
• Childcare (PrimRose) $500.00 per week
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Medical Insurance
• Medical (no vision or dental)– Family $178.00
• Medical, vision, dental– Family $345.00
Gym membership (optional)
$32.00 per person
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Transportation expenses
• Gas – $3.70 per gallon
• Oil– $13.00 per car per mo
• Auto expenses/maintenance– $50.00
• Tolls/bus/subway etc…– (If you live in Fla or work off of 400—you will need to pay for toll
roads)– $25.00 per month- (If you work in downtown Atlanta, or another major city, you will
need to pay for parking expenses)- $250.00 per month
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Debt Payments…
• The luck…or unluck of the draw
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Entertainment Expense
• The luck…or unluck of the draw
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Pet expenses• Big dogs--$40.00 per dog per week (food)• Big dogs—$100 vet expense per dog per month• Little dogs--$10 per dog per week (food)• Little dogs--$50 per dog per month
(vet/grooming)• Rabbits, guinea pigs, hamsters, ferrets, random
farm animals $40.00 per month (food & bedding)• Cats--$10 per cat per week (food)• Cats--$50 per cat per month (vet)• Fish--$5 per month• Horse--$300.00 per month ($500.00 food +
board)
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Clothing…
• You can expect to spend approximately $50 per person per month (min.) clothing expense—if you buy new from a department store.
• You can bargain shop/thrift shop/discount store/consignment sale/ebay etc…
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Savings…
• You need to put aside 10% of your net income for a rainy day…
• You can choose to contribute to a 401K, college fund for your kids and an emergency fund– Emergency fund is estimated at putting aside
3-6 months of monthly income away in case of “Emergency”…
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Miscellaneous expenses…
• Wal-Mart/Target/K-Mart/Best Buy…the STUFF of life…$50 per person per month
• Gifts/donations (church tithes 10%)– Optional expenses..up to you…remember
Carnegie “Those with great wealth have great responsibility”
• Grooming—hair/makeup etc– $15.00 per person per month