Summer Associate (NET) Salary

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Anonymous User
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Summer Associate (NET) Salary

Postby Anonymous User » Fri May 31, 2013 1:11 pm

Hey all,

I'm sure this has been discussed before, but I wasn't able to find the thread in search. I'm a summer at a V50 in CA and I just received my first paycheck, which had 38% tax. With 38% tax, this would make the $30,000 gross summer salary come to a net $18,000. Am I missing something here, or is just the sad reality of taxes? Any advice would be appreciated. Thanks in advance.

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francesfarmer
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Re: Summer Associate (NET) Salary

Postby francesfarmer » Fri May 31, 2013 1:17 pm

You may get some money back when you file next year, depending on how much total you make for the year and your deductions. Don't despair.

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guano
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Re: Summer Associate (NET) Salary

Postby guano » Fri May 31, 2013 1:21 pm

Anonymous User wrote:Hey all,

I'm sure this has been discussed before, but I wasn't able to find the thread in search. I'm a summer at a V50 in CA and I just received my first paycheck, which had 38% tax. With 38% tax, this would make the $30,000 gross summer salary come to a net $18,000. Am I missing something here, or is just the sad reality of taxes? Any advice would be appreciated. Thanks in advance.
welcome to being a grown up.

Also, this is why there's a lot of money in tax minimization strategies

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francesfarmer
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Re: Summer Associate (NET) Salary

Postby francesfarmer » Fri May 31, 2013 1:26 pm

guano wrote:welcome to being a grown up.

+1

NanaP
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Re: Summer Associate (NET) Salary

Postby NanaP » Fri May 31, 2013 1:40 pm

was just thinking the same thing today. But it will probably be closer to 22k, than 18k, which is still pretty good for 3 months.
That's why lots of people work int he city but commute from outside, although some cities have commuter taxes

lukertin
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Re: Summer Associate (NET) Salary

Postby lukertin » Fri May 31, 2013 1:40 pm

Anonymous User wrote:Hey all,

I'm sure this has been discussed before, but I wasn't able to find the thread in search. I'm a summer at a V50 in CA and I just received my first paycheck, which had 38% tax. With 38% tax, this would make the $30,000 gross summer salary come to a net $18,000. Am I missing something here, or is just the sad reality of taxes? Any advice would be appreciated. Thanks in advance.

For a 30k/yr salary, you can expect to pay about $2000 in federal income tax. $1200 in Social Security. $400 in Medicaid. Then whatever state & local income tax you have to pay.

Whatever that is in total, it's not 38% (20% max, and that's a very liberal overestimate). Be more responsible when filling out W-4's.

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holdencaulfield
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Re: Summer Associate (NET) Salary

Postby holdencaulfield » Fri May 31, 2013 2:13 pm

Unless CA state tax is a large portion of that, you need to go to the firm administer or HR person and seriously reduce your federal withholding.

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Lasers
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Re: Summer Associate (NET) Salary

Postby Lasers » Fri May 31, 2013 3:24 pm

wait, 38%? is that right? geezus.

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francesfarmer
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Re: Summer Associate (NET) Salary

Postby francesfarmer » Fri May 31, 2013 3:35 pm

Lasers wrote:wait, 38%? is that right? geezus.

It might be right if he was on track to make his biweekly pay x 26 pay periods over the year, but he's not. He will get a lot back when he files his taxes if he only makes $30k gross this year. Living in NYC and paying federal, state and city taxes, my tax rate on >30k is ~25% and California is supposed to have lower taxes (at least I thought that when I worked there).

dixiecupdrinking
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Re: Summer Associate (NET) Salary

Postby dixiecupdrinking » Fri May 31, 2013 3:58 pm

Yeah, they are withholding as if you were a first year associate. You'll get lots of it back in the spring. You will pay that much when you're really working there, though.

lukertin
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Re: Summer Associate (NET) Salary

Postby lukertin » Fri May 31, 2013 4:04 pm

dixiecupdrinking wrote:Yeah, they are withholding as if you were a first year associate. You'll get lots of it back in the spring. You will pay that much when you're really working there, though.

That's stupid. Walk into the HR office and demand that they increase your withholding exemptions.

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francesfarmer
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Re: Summer Associate (NET) Salary

Postby francesfarmer » Fri May 31, 2013 4:53 pm

lukertin wrote:
dixiecupdrinking wrote:Yeah, they are withholding as if you were a first year associate. You'll get lots of it back in the spring. You will pay that much when you're really working there, though.

That's stupid. Walk into the HR office and demand that they increase your withholding exemptions.

Eh. I kind of like getting a big tax return as opposed to spending my extra money slowly all year long.

lukertin
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Re: Summer Associate (NET) Salary

Postby lukertin » Fri May 31, 2013 5:04 pm

francesfarmer wrote:
lukertin wrote:
dixiecupdrinking wrote:Yeah, they are withholding as if you were a first year associate. You'll get lots of it back in the spring. You will pay that much when you're really working there, though.

That's stupid. Walk into the HR office and demand that they increase your withholding exemptions.

Eh. I kind of like getting a big tax return as opposed to spending my extra money slowly all year long.

I see that you like giving the government free money.

anongoodnurse
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Re: Summer Associate (NET) Salary

Postby anongoodnurse » Fri May 31, 2013 5:48 pm

I see that you like giving the government free money.


At current rates, the $50 or whatever you could earn in interest over nine months might be outweighed by the hassle of making sure to set aside the tax savings over the summer, setting up a CD or whatever, and then avoiding the temptation to cash it in early if you need the money before you get your return the following April.

lukertin
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Re: Summer Associate (NET) Salary

Postby lukertin » Fri May 31, 2013 5:49 pm

Sure, if you're financially irresponsible

anongoodnurse
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Re: Summer Associate (NET) Salary

Postby anongoodnurse » Fri May 31, 2013 5:58 pm

Lots of law students are financially irresponsible.

And in any event, lots of people (and companies and foreign governments) are basically fine with letting the feds hold their money in the short term for basically free these days.

http://money.cnn.com/data/bonds/

Anonymous User
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Re: Summer Associate (NET) Salary

Postby Anonymous User » Fri May 31, 2013 6:39 pm

I didn't want to start a new thread, but I have a somewhat less stupid question.

Is anyone else's firm operating on a bi-monthly pay schedule? My firm pays bi-monthly and not semi-weekly so our pay isn't for even increments of work days. My paycheck was for 3 weeks of work (didn't get us into the last payroll cycle), but was for slightly less than 3 weeks at 3077 per week.

My question is whether I should ask about whether the last paycheck will be adjusted or should I just let it slide (and potentially lose something on the order of $500-1000 if they don't fix it).

Firm is a biglaw firm with 100+ summers in multiple offices so I can't imagine that I'm the only one thinking about this.

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laxbrah420
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Re: Summer Associate (NET) Salary

Postby laxbrah420 » Fri May 31, 2013 6:42 pm

@anon, 6:39.
Dude, payroll's job is to deal with questions like that. Just ask. They're not exactly ivy graduates who are gonna look down at you for your simpleton understanding of payroll procedures. And they do fuck up.

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guano
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Re: Summer Associate (NET) Salary

Postby guano » Fri May 31, 2013 6:55 pm

Anonymous User wrote:I didn't want to start a new thread, but I have a somewhat less stupid question.

Is anyone else's firm operating on a bi-monthly pay schedule? My firm pays bi-monthly and not semi-weekly so our pay isn't for even increments of work days. My paycheck was for 3 weeks of work (didn't get us into the last payroll cycle), but was for slightly less than 3 weeks at 3077 per week.

My question is whether I should ask about whether the last paycheck will be adjusted or should I just let it slide (and potentially lose something on the order of $500-1000 if they don't fix it).

Firm is a biglaw firm with 100+ summers in multiple offices so I can't imagine that I'm the only one thinking about this.

Feel free to ask, but it's safe to assume they know what they're doing.
It sounds right. Bi monthly is not the same as semi weekly and one week is slightly less than half of bimonthly

AllTheLawz
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Re: Summer Associate (NET) Salary

Postby AllTheLawz » Fri May 31, 2013 6:58 pm

You should net $22-26k depending on state.

PM2353
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Re: Summer Associate (NET) Salary

Postby PM2353 » Fri May 31, 2013 7:25 pm

Do anyone know what online tax calculator is reliable? I had one calculator tell me after tax net pay was 40% of a 160k salary and another said there was only 33k worth of taxes. I thought I input the info correctly but I got really different answers.

BeenDidThat
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Re: Summer Associate (NET) Salary

Postby BeenDidThat » Sat Jun 01, 2013 12:17 pm

For christ's sake, just look at an IRS tax table, people. It's in the instructions for filling out a 1040.

Shibal Procedure
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Re: Summer Associate (NET) Salary

Postby Shibal Procedure » Sat Jun 01, 2013 3:12 pm

@ OP: That's right, but you'll get a bunch of it back next year.

Even though you're making 30K for the year, you're making it at a rate of 160K, which is in a significantly higher federal tax bracket. Thus, you will be taxed like a motherF.

Fear not, however. You will get most (and I do mean MOST) of the federal withholding back when you file your tax return. (e.g. I had like ~7K withheld from federal tax. got ~6K back from my tax return). The government knows what your tax liability in the end is, and in your case, your liability is actually really small (for 30K a year; not 160K). The federal government will pay most of it back.

The state government taxes vary. In my case, I paid something like ~2K in state/local taxes, which was apparently appropriate because my state/local tax liability came out to something like ~1.5K. So I only got like ~$500 back.

Don't worry, you're not missing anything. You'll end up coming out with ~26K after you get your tax return. (But you'll have to live on ~20K for now)

Anonymous User
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Re: Summer Associate (NET) Salary

Postby Anonymous User » Sun Jun 02, 2013 10:08 pm

OP here. Thanks for the advice everyone.

It seems as if my two options are either to increase my withholding exemptions or just wait until I get my tax return next year, correct? I'm going to put most of the money into savings regardless, so I'm not dying for the extra money right now. Any more advice on what other people in my position have routinely done? Thanks in advance.

Anonymous User
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Re: Summer Associate (NET) Salary

Postby Anonymous User » Fri Aug 09, 2013 5:41 pm

Edit: Was able to answer my own question -- sorry, never mind.




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