2014 and 2015 Income Tax Brackets

6 Replies

If a person makes a gross income of $175,000 in 2014. How is the federal tax exactly calculated? $175,000 joint will put you in the 28% tax bracket.  Do you get taxed 28% on the whole amount or incrementally? : 28% from $151,201 to $175,000 and 25% from $74,901 to $151,200 and so forth?

Here Georgia the state tax is 6% and FICA is 15.3%. I believe either social security or medicare is taxed at 15.3% only up to $118,000, but not 100% sure.

Can anyone here give me a break down on a $175k W2 income?

1) Federal taxes paid.

2) FICA taxes paid (Social Security and Medicare)

3) State Tax (6%)

Thank you.

James Park, Lender in GA (#NMLS 157229)
678-865-6250

Hi @James Park, here I found an article that may answer your question: 

How Tax Brackets Work: Examples and Myth Busting

"Your tax bracket is not the tax rate you pay on all of your income after adjustments, deductions and exemptions.

Your tax bracket only determines the amount your income tax increases if you earn one additional dollar of income (ignoring the effects of rounding.)"

@Rada Vassil

Exactly the information I am looking for. Thank you.

Do you know if the state tax is calculated the same way? Do you know how to calculate the state tax on a $175k gross income is calculated? Here in GA the state tax is 6%. 

Trying to grasp the difference of what amount one would save on state income tax if one lives in a no income state like TX or FL making $175k.

FICA is straight forward at 15.3%. 

Thank you,

James Park, Lender in GA (#NMLS 157229)
678-865-6250

Hey @James Park  I will take a swag at it.  Since we have no idea about deductions, exemptions or credits, lets go with $175k Taxable Income.

For Federal (using Form 1040), you would pay $36,247, which is an effective rate of 20.7%

For our state of GA (using Form 500) you would pay $10,240, which is an effective rate of 5.85%

Social Security would be capped at 6.2% of $117,000 so taxes paid is $7,254

Medicare tax would be 1.45% on all income, so tax of around $2,537

Can you say Alternative Minimum Tax AMT.? that is what you will pay for after you reach 82,100 in 2014. It is the second calculation and you usually wind up paying it because it is the higher of the two. AMT is no different if you don't pay state tax but your regular tax credits you for state tax paid to a certain extent when you do your federal.   

It is simple for states with no income tax you save 6-9% depending on the state you move with no state tax like Florida or NH.  They get money some other way from you and it depends on the state.

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