Anyone who allows the IRS to withhold 25% while supporting 4 people on a salary of $45,000, needs to simply file a W-4 form and increase the number of exemptions claimed on the W-4 form. It’s really just that simple, unless there is another income involved, ie a spouse’s income which significantly raises the income of the family in question. The tax rate for a single person having an income of $45,000 for 2010 is $4,681 + 25% of income above $34,000 which works out to $7431, or about 16.5%. That’s assuming that no dependents are claimed. Even with just the personal exemption and no other dependents, the tax would then become $6518 or about 14.5%. That sounds like less than 17% to me. Add in the other exemptions and credits available and I’d be willing to bet that your actual effective Federal tax rate would be closer to 10% or less. Sometimes, when you do the math, you find that the things people tell you are just flat wrong. And pamlicorat, I don’t mean to say you’re wrong, I mean to say that what you’re being told by someone is basically wrong as far as Federal taxes go.
Anyone who allows the IRS to withhold 25% while supporting 4 people on a salary of $45,000, needs to simply file a W-4 form and increase the number of exemptions claimed on the W-4 form. It’s really just that simple, unless there is another income involved, ie a spouse’s income which significantly raises the income of the family in question. The tax rate for a single person having an income of $45,000 for 2010 is $4,681 + 25% of income above $34,000 which works out to $7431, or about 16.5%. That’s assuming that no dependents are claimed. Even with just the personal exemption and no other dependents, the tax would then become $6518 or about 14.5%. That sounds like less than 17% to me. Add in the other exemptions and credits available and I’d be willing to bet that your actual effective Federal tax rate would be closer to 10% or less. Sometimes, when you do the math, you find that the things people tell you are just flat wrong. And pamlicorat, I don’t mean to say you’re wrong, I mean to say that what you’re being told by someone is basically wrong as far as Federal taxes go.