I made about $200k and had $39k withheld for federal taxes which is about 19.5%. An additional $11k was withheld for OASDI + Medicare. My tax advisor says I’m going to owe $25k to federal this year. That can’t be right though, can it? There are some websites that can estimate it for free (I used Intuit and Nerd wallet), and they’ve said that I just owe $1000-$3000 for federal.
Did you fill out your w4 correctly?
Maybe he is including FICA? 20% in federal taxes alone seems about right for 200k income.
Thanks, he also specifically said that I need to add $750 per pay check for next year, so I think he is not including FICA.
What is FICA?
Get a second opinion
Like you said you can easily calculate this yourself. It’s not rocket surgery. You know all your details better than anyone else.
You gunna owe son. Tax at that TC should be around 50k.
Your effective rate is about 20% and your marginal is 32%. Your tax guy is stupid. Use an online calc like smartasset.com's. You owe about $40k to fed for the year and $11k to Fed FICA (W2 employment) which would have been withheld for you by payroll. If you already paid $39k plus FICA, and you realized a loss, you may even get a refund. If the money is from RSUs, then you will owe FICA and Fed, which withhold at 22% but that is lower than your marginal+FiCA rate. There is no scenario where you owe $65k in federal taxes on $200k income, especially with capital losses ($3k of which are tax deductible towards your income for each year now and in the future). You might hit that if you include state incomes taxes in a high tax state. Rule of thumb for napkin mathing your take home is assume 35% taxes (fed, fica, state) and be happy when the real effective of those is closer to 30%. For you, that willl be about 26% + whatver your state effective rate is, assuming W2 income, RSUs, ESPP or other short term capital gains.
thanks so much for this! About $32k of my $200k of income was from RSU’s that vested. But it’s been taxed when it vested (for federal and FICA) already.
Depends on how much you withheld.
Do yourself a favor and do your own taxes, it’s not hard.
Not sure why you would really need a tax advisor. $200k isn't really a huge amount and the tax software these days are pretty detailed. Do your own taxes and it's not hard.
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How do you file (single, married filing jointly, etc.)? Did you sell stocks? How long did you hold those stocks for? Need more information.
So I’m filing single, I lost a bunch of money in stocks this year and realized the losses.
You can only realize 3k in net losses per year