Clarification regarding taxes in my bi-weekly paycheck.
Hi all, I have a question regarding my bi-weekly paycheck and wanted to check if the taxes I am paying are correct. I am on H1B Visa and work in California. Max out ESPP and 401K W4 Maritial Status: Single Allowances: 1 Yearly salary : $130K Number of paychecks: 26 Bi-weekly Gross Pay: $5000 Taxes are: Federal Withholding: $828.73 Federal Social Security Tax: $308.51 Federal Medicare Tax: $72.15 California Withholding : $345.02 California VDI: $49.70 Employee GTLI Taxable: $5.84 Total Taxes paid: 1609.95 Please let me know if the taxes I am paying are correct and If I could save somewhere.
Do you get stock? If so your witholding should likely be much higher. Eg negative allowances.
Thanks guys. Suggestions were helpful.
Social Security and VDI would go away in the latter half of the year once you cross the income limits
Why would SS and VDI ever go away?
There is an income threshold for SS (I forget how much at the moment), and when you reach it you no longer have to pay SS. For example, if the threshold were $50K, you'd stop paying SS once your YTD earnings reached that number. So probably in the next few months you'll be getting $300 more per paycheck.
The 2018 SS cap is $128,400 so you won’t hit that cap since you make $130k and contribute to 401k. As your salary goes up, you’ll start to experience the bump first in December, then earlier Nd earlier in the year.
the only thing you can control is the number of allowances - more allowances = *less* $$ put towards withholding. also, putting $ in 401 lowers your taxable earnings
You have it backwards. More allowances = less $$ towards withholding.
you’re right - updated the post