Submitted by [deleted] t3_yioz5g in personalfinance
[deleted]
Comments
dragmagpuff t1_iujr7pi wrote
Why do you think your income tax withholding is too high? It's 28% of your gross income. The top marginal tax brackets you are in are 24% for federal and 9.3% for state.
AdditionalAttorney t1_iujqmq1 wrote
You’re being taxed at the 20% federal tax rate. And 8% state.
The rest are other taxed and deductions.
penguinise t1_iujrv44 wrote
There is something more complicated about your pay than you are letting on.
Your FICA wage base for this check is $5,040.64 (figured as Social Security divided by 6.2% or Medicare divided by 1.45%), implying that your gross compensation is actually even higher than that, since your insurance contributions (health, etc.) are a Section 125 deduction and subtract from your FICA wage base.
Moreover, "Voluntary Disability" is certainly not a normal line-item in that amount, so I am wondering if it represents something other than a standard CA VPDI contribution.
Also, your federal withholding is too high for even your FICA wage base, which would suggest you did not complete your Form W-4 accurately (you don't say what withholding you requested).
stopearthmachine t1_iuk1nx8 wrote
Could a signing bonus (given to me from a previous paycheck, not the one sampled in the above post) contribute to my SS tax being higher on a regular paycheck since it counted toward my overall income?
penguinise t1_iuk4bic wrote
No. FICA is 7.65% of your first $147,000 of wages paid by that employer - since it's applied as a flat tax it is representative of the gross pay on the current check.
The most common cause of this would be receiving a taxable fringe benefit or other non-cash compensation item, which adds to your taxable wages for withholding but not the cash paid.
SpiritualQuokka t1_iujq563 wrote
The IRS has a tool to help you determine the best way to fill out your W4: https://www.irs.gov/individuals/tax-withholding-estimator
California may have a similar tool for state withholding. Complete those tools and give new W4s to your employer. Repeat the process at the start of 2023, and 1-2 times/year (more often if you have a change in your income or other factors that affect your taxes) so that you know your withholding is correct.
zffch t1_iujsg62 wrote
Is the "Voluntary Disability" CASDI and/or CAVPDI? I'm assuming so, as every worker in CA is required to pay one or the other, and you didn't list it separately.
In either case, it should only be 1.2% of your income, and should not exceed $1,601.20 for the year. Ask your employer why they're deducting so much. It's a flat rate so it shouldn't be affected by your W-4.
If it actually refers to a private disability plan and not the state disability tax, then you're paying a lot for disability insurance and should also ask why.
shadow_chance t1_iujtyu2 wrote
Your net pay looks mostly correct, federal a bit too high maybe. Can be fixed by accurately filling out the W4.
That disability policy is killing you though.
stopearthmachine t1_iuk1t7b wrote
I incorrectly labeled the disability policy. I have updated my post to fix the error.
shadow_chance t1_iuk8hib wrote
You'll probably need to post a redacted screenshot of your actual paystub for detailed help. I can get close on most of your withholdings on www.paycheckcity.com but not all. Something is wrong with your numbers or your W4. Or possibly your employer's payroll.
Rave-Unicorn-Votive t1_iujryrm wrote
Are you sure on the $120k/yr and $4615 gross? Did you leave out a 401k deferral? Because the FICA taxes are based on a $5040 gross ($121k if semi-monthly, $131k if bi-weekly).
grant570 t1_iujsw8k wrote
8% tax in CA and that voluntary disability are your main problems, but using the tax tables your federal should be about $750 a paycheck, but you can go on irs site and use their withholding calculator to get an exact figure.
Annonymouse100 t1_iujuzd2 wrote
As others have mentioned the only red flag I see is the Voluntary Disability. The California employee contribution rate for disability is 1.1% and your disability is almost 6%?
One thing that will help bring down your overall tax rate (if you can afford it) is upping your 401K contributions. You are not saving enough in your 401K right now, and the more tax advantaged savings the better.
Liquidretro t1_iujrl1v wrote
Your voluntary Disability life insurance policy seems really expensive. It's 41% of your total benefits including your 401k contribution. Have you shopped this on the private market to see how things would compare?
Do you work in a dangerous industry?
Plug your numbers into this minus the other deductions and see how it compares. https://smartasset.com/taxes/paycheck-calculator then use the IRS W4 calculator to adjust. I'm not sure an incorrect W4 is your problem here.
benicebitch t1_iujr8a2 wrote
Looks about right.
That's a crazy expensive disability policy.