After tax pay for summer associates Forum

[bringmehome]

How much should an NYC summer associate expect to receive in each paycheck assuming a $6,200 biweekly pretax salary? Is it about 40% taken out?

[Anonymous User]

http://www.paycheckcity.com/ Will get you exactly the answer you want.

Note that it's possible to claim exemptions (or some other tax term of art) to reduce withholding (and increase weekly pay) since withholding will otherwise come as though you were earning 160K/year. However you need to claim dozens of them, and that can cause problems for firms. Some places advocate it, however, such as a career services bulletin from Georgetown that gets posted a lot.

I worked for a tax firm last summer and they withheld as though it were a yearly salary and I had to wait to file for a large refund. Kind of annoying.

Take home should be about 60-65% of base though, depending on where you live over the summer.

[Sup Kid]

Did anyone claim multiple exemptions last summer to reduce withholding, and if so, how many exemptions did you claim? Also, did you ask the firm about doing so beforehand? Finally, if you are subletting in NYC for the summer, but don't use the sublet address for mail or anything else, do you have to pay NYC taxes? Thanks.

[pasteurizedmilk]

You'll end up paying almost no taxes.

Edit: that's after the refund. Like they mentioned above, if you can tweak withholdings you could get fed. withholding down to a more realistic amount though. depends on the firm though.

[MrKappus]

I'm pretty sure "tweaking" your exemptions requires fraud. You either have the basis for exemptions or you don't. I'm not saying you're going to the pen for doing it, but the interest income you'd get on about $8k from August-December might not be worth it.

[Sup Kid]

I'm pretty sure "tweaking" your exemptions requires fraud. You either have the basis for exemptions or you don't. I'm not saying you're going to the pen for doing it, but the interest income you'd get on about $8k from August-December might not be worth it.

Is the fact that you know your total income for the year will be $30k and not $160k not a valid basis for the exemptions? (This is a legit question, not trying to be snarky).

[fatduck]

I'm pretty sure "tweaking" your exemptions requires fraud. You either have the basis for exemptions or you don't. I'm not saying you're going to the pen for doing it, but the interest income you'd get on about $8k from August-December might not be worth it.

Is the fact that you know your total income for the year will be $30k and not $160k not a valid basis for the exemptions? (This is a legit question, not trying to be snarky).

Unfortunately, it is not. I wouldn't claim bogus exemptions, either. You won't get in trouble for it, but the IRS may review your exemptions and cap them, which results in extra paperwork for your firm, which they probably won't appreciate.

[MrKappus]

I'm pretty sure "tweaking" your exemptions requires fraud. You either have the basis for exemptions or you don't. I'm not saying you're going to the pen for doing it, but the interest income you'd get on about $8k from August-December might not be worth it.

Is the fact that you know your total income for the year will be $30k and not $160k not a valid basis for the exemptions? (This is a legit question, not trying to be snarky).

http://www.irs.gov/pub/irs-pdf/fw4.pdf

No, I see what you're saying. Unfortunately, the number of exemptions you can claim is matter of fact, not opinion, and you'll see at the bottom of that form your tax return that you declare, under penalty of perjury, that it's true, correct, and complete to the best of your knowledge.

Edit: that's a personal allowances form. Completely different than exemptions. Google "IRS exemptions worksheet" and I'm sure you can find it.

[Sup Kid]

I'm pretty sure "tweaking" your exemptions requires fraud. You either have the basis for exemptions or you don't. I'm not saying you're going to the pen for doing it, but the interest income you'd get on about $8k from August-December might not be worth it.

Is the fact that you know your total income for the year will be $30k and not $160k not a valid basis for the exemptions? (This is a legit question, not trying to be snarky).

http://www.irs.gov/pub/irs-pdf/fw4.pdf

No, I see what you're saying. Unfortunately, the number of exemptions you can claim is matter of fact, not opinion, and you'll see at the bottom of that form your tax return that you declare, under penalty of perjury, that it's true, correct, and complete to the best of your knowledge.

Edit: that's a personal allowances form. Completely different than exemptions. Google "IRS exemptions worksheet" and I'm sure you can find it.

I think I meant allowances, not exemptions. Either way, it unfortunately doesn't seem that there is any discretion to decrease the regular paycheck withholdings, even though it logically should be allowed (damn tax code). Thanks for the input.

[pasteurizedmilk]

I'm pretty sure "tweaking" your exemptions requires fraud. You either have the basis for exemptions or you don't. I'm not saying you're going to the pen for doing it, but the interest income you'd get on about $8k from August-December might not be worth it.

Nah it doesn't. I've got two tax accountants (albeit drunk ones) in the room with me confirming as much.

[MrKappus]

I'm pretty sure "tweaking" your exemptions requires fraud. You either have the basis for exemptions or you don't. I'm not saying you're going to the pen for doing it, but the interest income you'd get on about $8k from August-December might not be worth it.

Nah it doesn't. I've got two tax accountants (albeit drunk ones) in the room with me confirming as much.

You tell me how to fill out a W-4 differently (or claim an exemption without having a spouse or dependent that doesn't exist), and I'll believe you (and your drunk accountants). Until you tell me how to do that, I going to go with my understanding.

Edit: instead of "fraud," let's say "perjury"? Am I still wrong?

[PKSebben]

I'm pretty sure "tweaking" your exemptions requires fraud. You either have the basis for exemptions or you don't. I'm not saying you're going to the pen for doing it, but the interest income you'd get on about $8k from August-December might not be worth it.

Nah it doesn't. I've got two tax accountants (albeit drunk ones) in the room with me confirming as much.

You tell me how to fill out a W-4 or claim an exemption without having a spouse or dependent that doesn't exist, and I'll believe you (and your drunk accountants). Until you tell me how to do that, I going to go with my understanding.

hey bro, you can put whatever you want in that box. Put 32 deductions down and they'll tax you accordingly. Lots of summers did this.

[Sup Kid]

I'm pretty sure "tweaking" your exemptions requires fraud. You either have the basis for exemptions or you don't. I'm not saying you're going to the pen for doing it, but the interest income you'd get on about $8k from August-December might not be worth it.

Nah it doesn't. I've got two tax accountants (albeit drunk ones) in the room with me confirming as much.

You tell me how to fill out a W-4 or claim an exemption without having a spouse or dependent that doesn't exist, and I'll believe you (and your drunk accountants). Until you tell me how to do that, I going to go with my understanding.

hey bro, you can put whatever you want in that box. Put 32 deductions down and they'll tax you accordingly. Lots of summers did this.

Is 32 the actual number, or was that just a random through in? How do you figure out the actual number?

[MrKappus]

I'm pretty sure "tweaking" your exemptions requires fraud. You either have the basis for exemptions or you don't. I'm not saying you're going to the pen for doing it, but the interest income you'd get on about $8k from August-December might not be worth it.

Nah it doesn't. I've got two tax accountants (albeit drunk ones) in the room with me confirming as much.

You tell me how to fill out a W-4 or claim an exemption without having a spouse or dependent that doesn't exist, and I'll believe you (and your drunk accountants). Until you tell me how to do that, I going to go with my understanding.

hey bro, you can put whatever you want in that box. Put 32 deductions down and they'll tax you accordingly. Lots of summers did this.

Haha hey bro...I'm not saying you can't do whatever you want. I'm not even saying it'll cause problems with the IRS. What I'm saying is that allowances and exemptions are matters of fact, and you sign a statement averring your return's accuracy. We're in a profession w/ a governing body that dings people for failing to mention speeding tickets on their law school apps. I'm not about to sign a tax return that I know is inaccurate. Do what you want.

[pasteurizedmilk]

I'm pretty sure "tweaking" your exemptions requires fraud. You either have the basis for exemptions or you don't. I'm not saying you're going to the pen for doing it, but the interest income you'd get on about $8k from August-December might not be worth it.

Nah it doesn't. I've got two tax accountants (albeit drunk ones) in the room with me confirming as much.

You tell me how to fill out a W-4 differently (or claim an exemption without having a spouse or dependent that doesn't exist), and I'll believe you (and your drunk accountants). Until you tell me how to do that, I going to go with my understanding.

They're saying the worksheet is just to guide how many allowances you should claim to reach the appropriate withholding amount. it's not stating that you have a spouse or a dependent. Plus (my addition), you don't even turn in that part of the W-4. All you turn in is the bare amount of allowances you're claiming.

Has nobody taken Tax? damint we need lawylerly knowledge in here.

[PKSebben]

Is 32 the actual number, or was that just a random through in? How do you figure out the actual number?

32 was the actual number we used for our salary and summer program length. Maybe it was 36. I drank a lot that summer and things are hazy. I'll ask the guy at work tomorrow who told us all to do this (yes, tomorrow -- on a holiday....grrr) and post in this thread how to calculate.

[PKSebben]

I'm pretty sure "tweaking" your exemptions requires fraud. You either have the basis for exemptions or you don't. I'm not saying you're going to the pen for doing it, but the interest income you'd get on about $8k from August-December might not be worth it.

Nah it doesn't. I've got two tax accountants (albeit drunk ones) in the room with me confirming as much.

You tell me how to fill out a W-4 differently (or claim an exemption without having a spouse or dependent that doesn't exist), and I'll believe you (and your drunk accountants). Until you tell me how to do that, I going to go with my understanding.

They're saying the worksheet is just to guide how many allowances you should claim to reach the appropriate withholding amount. it's not stating that you have a spouse or a dependent. Plus (my addition), you don't even turn in that part of the W-4. All you turn in is the bare amount of allowances you're claiming.

Has nobody taken Tax? damint we need lawylerly knowledge in here.

This.

[pasteurizedmilk]

hey bro, you can put whatever you want in that box. Put 32 deductions down and they'll tax you accordingly. Lots of summers did this.

Is 32 the actual number, or was that just a random through in? How do you figure out the actual number?

Go to H&R Block and figure out how much you should pay in taxes. Then go to Paycheck City and figur eout how many allowances you should claim to reacha wtihholding a moutn closest to your estimated fed. tax liability.

To do this: 1) enter your annualized income (i.e. if you were working the whole year) then 2; enter fed. allowances until you reach a withholding amount that is approximately equal to how much you acutally should pay in taxes according to H&R block's calculator

link to H&R block calc. :

http://www.hrblock.com/free-tax-tips-ca ... mator.html

[PKSebben]

Haha hey bro...I'm not saying you can't do whatever you want. I'm not even saying it'll cause problems with the IRS. What I'm saying is that allowances and exemptions are matters of fact, and you sign a statement averring your return's accuracy. We're in a profession w/ a governing body that dings people for failing to mention speeding tickets on their law school apps. I'm not about to sign a tax return that I know is inaccurate. Do what you want.

w4 =/= how many deductions you take at the end of the year, broheim. You take as many exemptions to get you close to what you should owe at the end of the year.

[fatduck]

I'm pretty sure "tweaking" your exemptions requires fraud. You either have the basis for exemptions or you don't. I'm not saying you're going to the pen for doing it, but the interest income you'd get on about $8k from August-December might not be worth it.

Nah it doesn't. I've got two tax accountants (albeit drunk ones) in the room with me confirming as much.

You tell me how to fill out a W-4 differently (or claim an exemption without having a spouse or dependent that doesn't exist), and I'll believe you (and your drunk accountants). Until you tell me how to do that, I going to go with my understanding.[/quote]They're saying the worksheet is just to guide how many allowances you should claim to reach the appropriate withholding amount. it's not stating that you have a spouse or a dependent. Plus (my addition), you don't even turn in that part of the W-4. All you turn in is the bare amount of allowances you're claiming.

Has nobody taken Tax? damint we need lawylerly knowledge in here.

This is correct. As I stated before, however, you run the risk that the IRS may review your exemptions, decide that you've claimed way too many, and cap your exemptions at some reasonable amount. This will result in their sending what's known as a "lock-in letter" to you and your employer, instructing your employer to withhold taxes at a different rate than what you've claimed on your W-4. They might be annoyed by having to deal with this shit for a summer associate (or maybe they won't care). Just pointing out a possible risk.

You're not going to get in trouble with the IRS, though. Personally I'd just claim however many I needed.

edit: this has happened to me before, and i was only claiming like 10 iirc, and not making anywhere near $160k/yr.

[pasteurizedmilk]

Is 32 the actual number, or was that just a random through in? How do you figure out the actual number?

32 was the actual number we used for our salary and summer program length. Maybe it was 36. I drank a lot that summer and things are hazy. I'll ask the guy at work tomorrow who told us all to do this (yes, tomorrow -- on a holiday....grrr) and post in this thread how to calculate.

yeah i talked to my firm adn they said people claimed as many as 25. they cut me off at like 15 though

[MrKappus]

I did some internetz research and I think I'm wrong. Whee. Allowances are factual (can't lie on a W4), but exemptions are the Wild West.

I stands corrected.

[Sup Kid]

Hahaha, I'm in tax now but all we've learned is useless stuff like gaming the system to get room/board tax-free when you work in a hotel... Important, useful things like figuring out your tax withholdings for the summer have not been addressed, hence TLS postings.

Also, PKSebben and Pasteurizedmilk, thanks, I'm sure a lot of us appreciate it.

[PKSebben]

I did some internetz research and I think I'm wrong. Whee. Allowances are factual (can't lie on a W4), but exemptions are the Wild West.

I stands corrected.

First post of its kind on the entire internet. I quote for posterity.

[pasteurizedmilk]

This is correct. As I stated before, however, you run the risk that the IRS may review your exemptions, decide that you've claimed way too many, and cap your exemptions at some reasonable amount. This will result in their sending what's known as a "lock-in letter" to you and your employer, instructing your employer to withhold taxes at a different rate than what you've claimed on your W-4. They might be annoyed by having to deal with this shit for a summer associate (or maybe they won't care). Just pointing out a possible risk.

You're not going to get in trouble with the IRS, though. Personally I'd just claim however many I needed.

yeah i'd guess that's why my firm cut me off at 15