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Thread: Need help figuring out what I can affrord out in cali! (how bad are taxes)

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  1. #1
    Senior Member mr_coffee's Avatar
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    Talking Need help figuring out what I can affrord out in cali! (how bad are taxes)

    Hi guys,

    I wasn't sure if I should post this in the California forum or this one, I'm not sure how many people actually look at the California forum but if this needs moved, do it!

    Anyways on my list are the following:
    Buy a car out in cali
    Find a place to live (Going to try to live with people to help pay for it)
    Find rehab, I think theres one out in North Cali called SCI-FIT or STEp its like 100 bucks an hour like Project Walk.

    Well the offer letter said:
    A base salary of $2,884.62 paid every other week, equal to $75,000.00 on an annualized basis. Which is $5769.24 a month. So now I'm thinking wow thats a pretty nice chunk of money but I never thought about how bad the taxes are going to be out in cali. So I looked at the state tax which was 9.3%! So every month after state taxes I'll be getting: $5232.7

    What other taxes do I need to calculate into this? federal I'm assuming, and how much 401k and medical/dental should I invest? I asked my parents but my mom is on disability and doesn't really know and my dad is pretty bad with money (ha no joke). So I'm no sure where I would go to find this information.

    I'm trying to figure out how much disposable income I'll have so I can pick the right priced house and car.

    Thanks!



    Last edited by mr_coffee; 11-25-2008 at 04:54 PM.
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  2. #2
    Senior Member DaleB's Avatar
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    you're only at the 25% bracket for federal taxes. not too bad. gets worse. especially for single, unmarried, un-mortgaged. $18,750 will be your dues (leaving $56,250), unless brackets change next year, which they will. probably already have.
    Last edited by DaleB; 11-25-2008 at 05:33 PM.

  3. #3
    Senior Member DaleB's Avatar
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    you next cost of living bump, not to mention merit increase, will put you into the 28%. $22,078 in dues leaving you with $56,773, if you start at the bottom of the range @$78,851. moral of the story - your next raise needs to be a big one to cover the shift in tax bracket.

  4. #4
    Senior Member mr_coffee's Avatar
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    Thanks Dale,

    So basically I have $56,250 of disposable income a year or do I also have to subtract 6975 from 56,250 because of state tax? being 9.3? leaving me 49,275
    Last edited by mr_coffee; 11-25-2008 at 06:17 PM.
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  5. #5
    State taxes in California are pretty hefty, and it's likely they are going up because of the budget crisis.

    401k is a percentage of your pre-tax income. If you make $75k and save 20% towards retirement, then you are only taxed on $60k. Nice, huh ? Generally these plans allow you to choose what to invest the retirement funds in .. I'll leave that for someone who is actually good at investing

    Medical insurance cost depends on your employer. Ask the human resources department about this. I buy my own coverage (PPO) since I'm a contractor.

    You can look on craigslist.org to get an idea of what rent is like. If you are looking at the SF Bay Area / Cisco, I am guessing you will want to live in the south bay (unless they will let you mostly telecommute). If so, avoid places like East San Jose and East Palo Alto.

    Buying a home helps - you can deduct mortgage interest and property tax, among other things. The prices are outrageous compared to PA, but they seem to be on the way down recently ..

  6. #6
    Senior Member DaleB's Avatar
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    well...not so fast. you will also have FICA coming out, if i'm not mistaken is for social security and medicare, at 7.65%. that's another 5737.50. kaching. leaving more like $43k and change. these are all calculated from your gross, $75k.

    being single and earning solid middle class money means you pay lots of taxes.

    at this point you need to start thinking about deductions. you will have one or more to offset some of this burden, but not likely very many or by very much.

    this is all based on last year, so next year will be different. i'm only guesstimating.

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    Senior Member DaleB's Avatar
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    or is FICA included in Federal? oh...i don't remember. i'm at the limit of my tax knowledge. i do remember when you go over $97, 500 FICA stops...so I'm pretty sure it's separate from fed. haven't seen a pay stub in many years.

  8. #8
    Yes, it's amazing how quickly $ gets whittled away....

    One thing that is "cheaper" in California are real estate taxes, although it's all relative...

    So in a fantasy world where you have a rich benefactor willing to give/loan you a downpayment, now could be a great time to buy a little one bedroom condo as prices have dropped quite a bit with the market collapse. But I realize that you want to spend some time in CA and get to know the area before buying something. Just keep this idea in the back of your mind. CA is so expensive that you will be shocked about housing prices... but it is also painful to be throwing away money on rent when it could be going into your own home purchase. Maybe live in a house/apartment with roommates for awhile and save money for a few months/year and figure out what you want to do.

    One thought - if you itemize your taxes, ask your doctor (before you move) to write a prescription for SCI-FIT as physical therapy/treatment for SCI, and then you can itemize that has a medical expense.

    Remember, a good medical plan is essential, so make sure you review the options provided by your company. You want to be able to choose your doctors, as so few doctors know anything about SCI. Also, check with SCI-FIT (email or call them) and find out if they have ever had medical insurance cover their cost.

    Of course, in an ideal world you would max-out the allowed amount you can put in your 401K (especially if they are matching any of the money you put in). And ideally, get a Roth IRA each year.

    Actually, in these young years of your life, you can live a pretty fun life without spending a lot of money. Save if you can. SCI-FIT and housing will be your big expenses. Remember, a little bit saved now, should hopefully be a lot more later.....

    Then again, these days..... maybe you should just buy gold! It's awful seeing my parents lose nearly their entire retirement saving in the past few months.

    Yes, being single/unmarried/un-mortgaged does really hurt. It is a LOT cheaper to live as a couple then single. Doesn't seem fair...

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    Not CAli info, but you know the retirement math. What you put in now grows more than what you put in later. So you want to put as much into your retirement fund as you can. Basically, go for the max amount that they will match for the 401K. I think you said they have a good health plan. But obviously if there is a choice, pick the top. And YES take any optional LT dis! Just in case.


    Other then necessities (you need a car obviously)A good rule of thumb, is to spend the first year like you are still a broke college student. And don;t charge any more than you can pay off at the end of the month. Paying the min balance on credit cards will get you in over your head really fast.

    A really good idea to plan on roommates. Housing is a big expense. As far as the car goes, normally I would suggest a junker for a year or so (cheaper to insure too!) but considering you need to have mods done, it makes more sense to buy something that will last for a while.

    Ok, I think thats about all I told my son.
    Last edited by sjean423; 11-25-2008 at 07:08 PM.
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  10. #10
    Senior Member DaleB's Avatar
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    yes, it dwindles fast. add a car payment of ~$6k/year (assuming ~$25,000 loan). property taxes. sales taxes. rent or mortgage payment and expenses of $15-$20k/year. retirement savings of at least $10k/year. that'll leave about $1k/month for food, cable, chicks, etc. not bad for a start. all the bases covered. might squeeze out $2k/month without saving but that would be typical american of you...errr...um...i mean really really foolish, particularly given the young age at which you are capable of saving. this assumes starting out buying everything new. you can always stick with the "broke college guy" role for another 5 years and save a TON.

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