1L Take-home pay Forum

[law777]

If someone were to get a 1L SA for 10 weeks at $3,100/week ($31,000 total), what would be the take-home pay after taxes and the new adjusted student contribution, considering this was the only income reported that year?

[txadv11]

Don't know your state, I'll guess: $18,848.90

[usuaggie]

Don't know your state, I'll guess: $18,848.90

$18,848.91, Bob.

[DoubleChecks]

is this NYC? maybe $23,283.59

[viking138]

I could be totally off on this, but can't you say that you don't want any taxes withheld since you will be making so little (for the year) that you know you wouldn't have to pay taxes? Then you would get the full amount minus state/local taxes I believe.

[1984sheepdog]

federal taxes are designed to be completed even by those with a minimal education. moreover, your income is very simple: just wages and salary, not anything exotic, so it's extremely easy to estimate your tax bill with a high degree of accuracy.

here is how you do it: find a tax table, look up the bracket into which your income falls, use a calculator. and there, you have an answer in less time than it takes to write a post.

[random5483]

I could be totally off on this, but can't you say that you don't want any taxes withheld since you will be making so little (for the year) that you know you wouldn't have to pay taxes? Then you would get the full amount minus state/local taxes I believe.

31k is not "so little" that you have to pay no taxes unless you are supporting a family. Assuming he is an average law student who files as a single adult, he will owe taxes on the 31k. The taxes will be reduced due to educational credits/standard deduction/etc. The actual effective tax rate might be very low, but unless you calculate it ahead of time it is safer to pay taxes up front and get a refund.

[robotclubmember]

federal taxes are designed to be completed even by those with a minimal education. moreover, your income is very simple: just wages and salary, not anything exotic, so it's extremely easy to estimate your tax bill with a high degree of accuracy.

here is how you do it: find a tax table, look up the bracket into which your income falls, use a calculator. and there, you have an answer in less time than it takes to write a post.

It's not that simple. You will have a significant amount of student loan interest on your 1098-E, if you took out loans, which will help because you can deduct those on top of the standard deduction. EDIT: And of course, 1098-T for tuition fees. The Lifetime Learning Credit is the best way to use your 1098-T, unless you want to deduct in lieu of your standard deduction, but tuition fee deductions are capped at $4,000.

Income 31000

<Standard Deduction> 5800
<Personal Exemption> 3700
<Student Loan Interest> 2400 ...assuming $40K of debt from 1L. Prorate up/down accordingly.

AGI 19100

Tax Liability Before Credits 2,440 (8500*.10)+(10600*.15)
<Lifetime Learning Credit> 2,000 (capped at 20% of tuition up to $10,000)

Fed Tax Liability 440
Medicare 1302 (31000 x 4.2%)
Social Security 449.5 (31000 x 1.45%)

$28808.5 is what you're left with after federal tax liabilities but before state and local taxes. I don't know where you live or what your rates are for that state/locality, but hope that helps.

EDITS: Looking up tax stuff and revising, I need to plan my own taxes for the same reason.

[robotclubmember]

Just to add, you can deduct moving expenses as well. Since it's 1L, odds are you moved. Moving is expensive, you can deduct mileage and gas when relocating under these circumstances and any other moving costs. So let's assume you deduct another $300 from them (you could get away with more). At a marginal tax rate of 15%, hey, it's an extra $45 bucks. Depending on what good street corners you have in your area, that will buy you a pretty nice blowie at least.

[Bill Cosby]

Just to add, you can deduct moving expenses as well. Since it's 1L, odds are you moved. Moving is expensive, you can deduct mileage and gas when relocating under these circumstances and any other moving costs. So let's assume you deduct another $300 from them (you could get away with more). At a marginal tax rate of 15%, hey, it's an extra $45 bucks. Depending on what good street corners you have in your area, that will buy you a pretty nice blowie at least.

That only applies if you're working at both places.

[robotclubmember]

Just to add, you can deduct moving expenses as well. Since it's 1L, odds are you moved. Moving is expensive, you can deduct mileage and gas when relocating under these circumstances and any other moving costs. So let's assume you deduct another $300 from them (you could get away with more). At a marginal tax rate of 15%, hey, it's an extra $45 bucks. Depending on what good street corners you have in your area, that will buy you a pretty nice blowie at least.

That only applies if you're working at both places.

Not true. You don't have to be leaving a job. You just need to be moving to one. Deducting moving expenses for a full-time student is a little murky, but I would say you could get away with it.

[coolestguyever]

federal taxes are designed to be completed even by those with a minimal education. moreover, your income is very simple: just wages and salary, not anything exotic, so it's extremely easy to estimate your tax bill with a high degree of accuracy.

here is how you do it: find a tax table, look up the bracket into which your income falls, use a calculator. and there, you have an answer in less time than it takes to write a post.

It's not that simple. You will have a significant amount of student loan interest on your 1098-E, if you took out loans, which will help. EDIT: And of course, 1098-T for tuition fees. So let's say you make 31,000. And let's say you got a great LSAT score and some solid scholarships and you only pay $20,000 per year in tuition. (Note: if you end up paying any more than $20,000 in tuition, than it doesn't make a difference, you'll see why.)

Income 31000

<Standard Deduction> 5800
<Personal Exemption> 3700
<Student Loan Interest> 2400 ...assuming $40K of debt from 1L. Prorate up/down accordingly.
<Tuition Fees> 4000 ...capped at $4K per year.


AGI 15100

Fed Tax Liability 1,840 (8500*.10)+(6600*.15)
Medicare 1302 (31000 x 4.2%)
Social Security 449.5 (31000 x 1.45%)

$27,408.50 is what you're left with after federal tax liabilities but before state and local taxes. I don't know where you live or what your rates are for that state/locality, but hope that helps.

Better after the edit. http://www.irs.gov/publications/p970/index.html explains educational credits and deductions; they are very complicated and you can try to figure it out based on your personal situation/numbers. There might be more that you can do re: reducing your tax liability, but either run the numbers yourself or go to someone who is qualified to help you.

[Bill Cosby]

Just to add, you can deduct moving expenses as well. Since it's 1L, odds are you moved. Moving is expensive, you can deduct mileage and gas when relocating under these circumstances and any other moving costs. So let's assume you deduct another $300 from them (you could get away with more). At a marginal tax rate of 15%, hey, it's an extra $45 bucks. Depending on what good street corners you have in your area, that will buy you a pretty nice blowie at least.

That only applies if you're working at both places.

Not true. You don't have to be leaving a job. You just need to be moving to one. Deducting moving expenses for a full-time student is a little murky, but I would say you could get away with it.

True, however, you do have to work 39 weeks in the following 12 months in the new location.

[robotclubmember]

True, however, you do have to work 39 weeks in the following 12 months in the new location.

Like I said, it's murky. I'm aware of what the tax code says. I'm also aware that people do claim moving expenses deductions for relocation to go to school full-time even if they did not work full-time for 39 weeks. I've never heard of it being an issue for anyone. If you want to be absolutely sure you're in compliance with tax code, then don't take it. If you like being flexible with interpretations, take it. It's too small to get audited either way.

[unc0mm0n1]

True, however, you do have to work 39 weeks in the following 12 months in the new location.

Like I said, it's murky. I'm aware of what the tax code says. I'm also aware that people do claim moving expenses deductions for relocation to go to school full-time even if they did not work full-time for 39 weeks. I've never heard of it being an issue for anyone. If you want to be absolutely sure you're in compliance with tax code, then don't take it. If you like being flexible with interpretations, take it. It's too small to get audited either way.

Did you work for Arthur Andersen?

[robotclubmember]

Did you work for Arthur Andersen?

Hey man, just a contributor here. I didn't tell anyone what to do. If you want to be assured you are in full compliance, don't deduct. If you are lenient with your interpretation, then take it, you won't be audited. Note that even after my edits, I still didn't add the moving expense deduction in my calculation above. It's too murky for that. But I'm just saying what happens to be true.

No one gives me props on this forum! Just because I say objectionable stuff doesn't mean it's false stuff. That tax calc above is golden, you're welcome btw.

[leobowski]

federal taxes are designed to be completed even by those with a minimal education.

Lol. The designers of the tax code intended it to be so complex it would create an entire industry of accountants/ tax lawyers. Even the IRS Comm'r doesn't file his own taxes.

You must be a 0L or otherwise completely unfamiliar with the IRC. I have a freaking accounting degree and I still had cold sweats when editing a LR article about conservation easement tax last week. The tax code is anything but simple.