I'm testing out the F-connect feature of Typepad, which should link my blog w/ my FB account.
Here is a question I pulled from yahoo answers. It caught my eye because its related to military matters and finance: I am reenlisting the the Air Force and receiving a $50,000 bonus. I do not pay any state taxes so I only want to know around how much I get to keep after taxes. I just returned from a combat zone and will not be going back for a long time. I couldn't reenlist overseas because I was just short of my window. Any help would do, but someone who has received the same or near the amount I am getting and could give me a rough estimate would help
Since he can't reenlist in a combat zone, the bonus is taxed at his
normal rate, which means it depends on base pay, TSP savings, and
how he gets the bonus. I'll make some assumptions here to show how
it works.
Let's say you are single, E-4, have over 4 years of service, and no TSP contributions, which
makes for a base pay of $2094/month or $25,129 a year. BAS and BAH are
not counted since they are allowances. Special pays and bonuses are
taxed, so you just have to figure it out what your expected income is
for the year.
This year the 15% tax bracket is between $8,350 to $33,950, and the 25% bracket
is between $33,950 to $82,250. (you can find these on page 101 of the i1040
pdf.)
You get roughly $10,000 in exemptions and deductions if you are single
with no dependents, which makes your starting taxable income about
$15,000, which means you start in the 15% bracket and each additional
dollar is taxed at that amount until you exceed that bracket.
If you get your full bonus this year, the first $19,000 will be taxed at 15% so your tax will be $2850
($15,000 regular income + $19,000 bonus = $34,000 limit on 15% bracket)
Your remaining $31,000 bonus will be taxed at 25%, so you will owe $7750 on that part.
Including Social Security & Medicare @ 7.65%: $3825
Your total tax liability is $7750 + $2850 + $3825 = $14,400 in taxes.
In this scenario, taking your bonus over 2 or more years would save about $2000
Comments