Job offer in LA - recent college graduate - good? (home, salary)

[EscapeCalifornia]

Originally Posted by cabrat

He doesn't really get any deductions. He's young, single, no house, no kids, and a full-time employee not a part-time contractor.

What deductions is he suppose to get?

Have you ever heard of the standard deduction and the personal exemption? If you make $70k, your taxable income isn't $70k. And if you're in the 25% or 10% tax bracket, you don't pay that on the first dollar. Federal and state tax rates are both progressive.

[cabrat]

Honestly I think there going to take away more deductions here soon and raise income tax to 15% the way this state is headed.

[smokingGun]

save some serious $$$ and get a roomie! Really, when you're just out of college it's easier to adjust to living with other ppl than 5 yrs from now.

[drshang]

Originally Posted by cabrat

Let me break it down.

70K GROSS

Federeal Income Owed (.25 Bracket thanks to Obama) = $17500
California State Income Owed = $7,000

NET INCOME = $45,500

Rent, TV, Utilities, Internet $1500/Month

$1500 X 12 Months = 18,000

NET INCOME AFTER RENT = $27,500

That leaves you with $27,500 which is probably comparable to making 38-40K in Texas.

or 2,291 for food/car/insurance/girlfriends etc a month.

Which I guess you can either get a nice car or live it up and still put at least $500 away each month like John said. Be advised as the economic condition is still very blurry in this state to try and have 6 months of rent reserves stored away.

Life changes at the snap of a finger.

This post is the biggest bunch of nonsense I've read on city-data in a while. Please ignore this.

Understand how the tax code works before quoting such ridiculousness as if it is total fact.

[cabrat]

Originally Posted by drshang

This post is the biggest bunch of nonsense I've read on city-data in a while. Please ignore this.

Understand how the tax code works before quoting such ridiculousness as if it is total fact.

What's your math? Why is it that others feel the need to bash ones post yet they have nothing to put on the table themselves.

Please do go ahead and enlighten us with all your godly, fruitful knowledge we can not live without.

[JohnG72]

Tony you are incorrect on this. First off, he will be able to immediately deduct any contributions to his 401K plan off of his gross income. Then he gets a standard deduction of $6909 and personal deduction of $3650. So instead of paying tax on $70K, he is paying tax on ~$59K. Part of that is taxed at different rates. So:

25% on the income between $34,000 and $82,400; plus $4,681.25

2010 Tax Rate Schedules: Marginal Ordinary Income Tax Brackets for Year 2010

So OP would pay $5,000 + 4681.25 in Federal Income Tax. So $9681.25 total, or about half what you stated it would be. And say he kicks in $200 a paycheck for his $401K plan...which is pre tax...and would total $5200 a year.....he would pay $1300 less a year in Federal income tax. State income tax will be in the $3,000-$4,000 range.

[cabrat]

I thought standard deduction was $5,700 this year? Either way it's a gross amount of money in my opinion to pay taxes on given the cost of living in California.

I'll admit, this is why everything I do employment wise in my life is 1099 and not W2. So even my knowledge on it is lackluster.

But the best position the OP could be in is to have an additional side job that is 1099 while having his full-time job would make everything from the side job a COMPLETE WRITE OFF.

I think that if you are working for someone it is one of the best positions to be in.

[SOON2BNSURPRISE]

Here is what I would do for the next 5 years at least.

Find a place that is within a 30 minute drive of work on a bad day. If you can find a small place that you can rent on your own, great, if not find a room to rent.

Max out your retirement account or 401K to at least get the biggest benefit from your employer, or at least put in 10% of your income if your employer matches or not. We have a match at my work and I love it. The more you put in the lower your tax bill will be. You can also borrow up to 50% of this for a downpayment on a home if you have to.

Put a percentage of your income into another forced savings account. Come up with a percentage that works for you such as 5% or 10% of your income. Your goal is to save for living expenses and the downpayment on a place for the future. (In your situation even 5% of $70,000 over a 5 year period would be $17,500 not counting interest during the saving period and will most likely be the amount needed for a 1st time buyer. I would prefer saving 10% and having over $35,000. )

Do not get into debt, pay cash for everything.

At the end of 5 years you will have the money needed to purchase your own place, and have a few years under your belt at your current employer.

This is what I would do anyway.

[drshang]

Originally Posted by cabrat

What's your math? Why is it that others feel the need to bash ones post yet they have nothing to put on the table themselves.

Please do go ahead and enlighten us with all your godly, fruitful knowledge we can not live without.

Tax situations are personal, individual, situational. The amount of taxes one pays can vary wildly depending on someone's situation.

The US uses a system of tax brackets, meaning for the first xx,xxx earnings one pays a 10% tax, then a 15% tax, then 25% tax, etc. CA uses the same system, starting at 1% and going up.

The likely effective total tax rate of the OP is 18-22% (state + federal), depending on the number of deductions and overall personal situation the OP is involved in.

Wikipedia has a decent enough article about it: Income tax in the United States - Wikipedia, the free encyclopedia

[jamesAUK]

Not sure what you mean "north of LA"? If I were you, given your work location and your personal preferences, I would live in the South Bay area. My personal favorite is south Redondo beach-- it's a really nice & safe area with ocean breezes, rolling hills, beaches, Palos Verdes nearby, and your commute to work won't be too bad. You can get a decent 1 bedroom apartment a little bit inland for around $1300 no problem.--vegaspilgrim

I don't really have a preference, I just assumed north LA would have been a safer place. But if I can find a decent place south of LA, I'm all for it.

I noticed this discussion turned into a tax and savings discussion---and I don't blame you guys. When we're talking about living in California, it is hard to avoid such subjects, and I'm glad it came up so that I can get a feel of what it would be like financially.

In Texas, I can take my gross salary every week and multiply it by 75% which is what I take home after all deductions.

Then I put a lot of that into other investment accounts I have outside of my employer. Right now, I have a 6 month reserve fund which I can use to sustain myself if I were to lose my job.

My biggest beef was--is it good for me to leave a company just after a year or a bit less being a new grad?

Second beef was making sure it was affordable. I'm not a big spender so I thought I'd be able to get by with a 70k salary while still being able to put something into savings.



Thanks for all the input. Keep the discussion going!