Joe Legal wouldn’t pay the employers share of SS (which is actually 7.65% not 6.2%).
Where do you get your numbers? I got mine from social security admin. 6.2% is the employee’s haircut, 6.2% is the employers haircut. If you look on your W-2, it is box #4. See also linky, notice it says employee and employees each. OASDI is social security and medicare. The self employed show what the total rate is, which is 12.4%. Your employer takes half and the employee takes half. HI is medicare hospital insurance which brings it to 7.65% each to the employer and employee.
You didn’t take into consideration the standard deduction or personal exemptions or child tax credit on the federal, which would have greatly reduced their taxes to just over 2%.
It doesn’t reduce it that much. How many child credits were you taking for Joe Legal? Standard deductions apply to income not the tax, so they reduce the AGI.
Sales taxes would have been paid equally both both Joes.
You mean Joe and Jose. True, though Jose would probably be spending more in Mexico by sending money home.[/quote]
One at at time.
In the old days it was commonly known as FICA. That’s social security. Currently 7.65% for both employee and employer. 6.2% for OASDI and 1.45 for Medicare.
Standard deduction is $11,400. Exemption for joe, mrs. joe, and the two little joes total $14,600. bringing taxable income down to $26,000. 2 child care credits of 41,000 each brings fed tax down to $1,069.
If Jose is sending money home, that means that Joe could be saving too, and not paying sales tax.
