Need help: making 6 figures half goes to taxes?

over a 3rd goes to federal, 1/10 goes to state, then there's social security and medicare. This is downright robbery!

Update:

Thanks, will look into a good accountant. Looks like turbo tax has reached its limit.

Update 2:

Broke and uneducated college students need not apply. Low 6 figures is bare minimum these days, I know it must look like a fortune to them. We are in different worlds.

Broke and uneducated students should be working on their GPAs instead of flaming yahoo answers. Then they wouldn't be so bitter about the chinese kid who stole their internship. Then they won't be so bitter when they graduate about not having a job. Kids, you have a lot to learn.

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  • 10 years ago
    Favorite Answer

    Better go back and check your math. At your income level you should be better at it than that. At today's tax rates, even with a 10% state tax hit, it's not possible to exceed 50% for taxes. About the closest you can get is around 49% and it takes several million a year in self-employment income to get that high. If your income is wages, about the highest you can get is 47%.

    If you're making $5,000,000 a year, I'm going to have a really hard time finding any sympathy for your tax burden, given that you're taking more than $2,500,000 home.

    Nobody with a 6-figure salary pays anywhere near 50% in income and FICA taxes. Even at $1,000,000 a year in wages, the upper limit of a 6-figure salary, the Federal tax hit for a single taxpayer is still less than 1/3. In the two states with 10% top marginal rates (NY and CA) the net rate is still around 9% at most and probably less. The Social Security tax is 6.2% up to the cap of $106,800 but stops entirely at that point. The Medicare tax rate is 1.45%. On a salary of $1,000,000 the combined FICA rate is 2.11%. That puts the combined Federal and State hit inclusive of FICA taxes at less than 44%.

    If your income is solely from wages there's no need to waste money on an accountant, even if you are making $1,000,000 a year. There's nothing that an accountant can do that Turbo Tax can't handle.

    If you have substantial other income aside from wages, which would be presumptive of someone with a high 6-figure salary, then a certified financial planner might be able to help in reallocating investments into equities that pay higher percentages of their dividends as qualified dividends as opposed to ordinary dividends or setting up tax-deferred investments for retirement. As far as the tax bite on your salary is concerned, it is what it is and nobody aside from Congress can change that.

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  • Alexis
    Lv 4
    10 years ago

    Your punctuation and grammar indicate that you are not a six figure employee or whatever you are. You are some moron who is on here wasting our time. People cannot give you accurate tax information when you don't give your exact salary. This person is a fool!

    Source(s): Actual college student, not like this fool who works at taco bell and dreams of the ghetto.
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