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Also check with your accountant, I think the your "Pay" check from the LLC would reduce the NetProfit from the LLC to 0, and you would only pay the Calf Income on the 200K, and Federal (maybe local).
I am from Sweden but I'm planning a move to the States. I already run an LLC in California and the question is now:
Lets say I make $200k in profits. The state corporation tax in California is around 9%. On top of that, there is a personal income tax of about 11%.
So, all in all, I should pay 20% in tax on those 200k = 40k.
Do I have to pay federal taxes on top of that as well? If so, how much is that?
Everyone pays federal income tax. And then state income tax is on top of that. And don't forget Medicare and Social Security Tax. Obviously corporate tax applies to corporate profit. Welcome to America.
Yes. Federal income tax on 200,000 is 28% if you are married, 33% if you are single.
The taxable amount is reduced by certain deductions/exemptions like children, mortgage interest on a home, real estate tax, business expenses, deductions for IRA's savings and 401K savings.
With a corporation, you probably need an accountant to tell you the bottom line. Also, their are different rules for non-resident aliens......not sure how that works.
Yes. Federal income tax on 200,000 is 28% if you are married, 33% if you are single.
You mean the top tax bracket for that income is 28%. The average federal income tax rate on 200k, assuming standard deduction and single filing, is around 24%.
The more you make, the more they take.
(Unless ofcourse, you are a Billionaire, and then there are so many legal loopholes....I suppose that is why the Super rich almost always seem to have Tax Attorney's). State tax, like so many have pointed out, varies from state to state, it can cost a fortune, or be nothing (some state's have no state tax), just depends.
The descriptors for tax brackets (i.e., "33%") do not indicate the percentage of tax you pay on your entire income. Rather, they describe the marginal tax rate - how much tax you'd pay on an additional dollar of income after a certain amount of income. Taxpayers pay distinct rates for different parts of their income.
While it's not precisely true, you can think of the US tax system charging the same tax on the first $X of income, regardless of how much you make in total, so the first ~$9k in income is free from federal income tax for everyone, even people making millions of dollars a year.
Without giving too much away, my spouse and I are in the 28% federal tax bracket, and our state has a 5.25% flat state tax rate. There are a number of complexities that I'm glossing over (including how the 28% tax bracket implies 15% tax on capital gains), but for comparison, our actual effective federal income tax rate is 15%, not 28%, and our actual effective state income tax rate is 5%, for a total effective income tax rate of 33%.
Last edited by bUU; 12-26-2013 at 03:47 AM..
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