September 11th

September 7th9/6/2018 
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Warm Up:  What is a freedom or purchase-like a house- that you are looking forward to in your adult life?  Why? How old will you be when it happens?

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Payroll and tax activity

Fill out your W-4 to determine the number of exemptions you will claim on your earnings.  Some helpful 

Complete your Pay Stub with all of the information requested.  Personal information, federal, medicare, social security and state taxes.  You will need your annual salary for this activity and to know that you are paid bi-monthly or two times per month.

Annual salary / # of pay periods
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Federal Tax Calculation 

Example: Determine tax, take-home income, and effective tax rate for $200,000
#        Range                                      Money in Bracket               Tax rate              Tax Paid
1          $0-$9,525                                $9,525                                     10%                $952.50

2          $9,526-$38,700                      $29,174                                    12%               $3,500.88

3          $38,701-$82,500                    $43,799                                   22%              $9,653.78

4          $82,501-$157,500                   $74,999                                   24%              $17,999.76

5          $157,501-$200,000                $42,499                                   32%              $13,599.68


                                                                                   Total Tax Paid:                      $45,688.60
                                                                                   Cumulative Tax rate:            22.8%
                                                                                   $45,686.60/$200,000
  

• Social Security & Medicare Tax - Tax Table
• State Income Tax - Colorado Tables. Use the percentage method on pg. 22 & 23.  Monthly and single or married.

Example:  

Monthly gross pay:                  $4,707
Subtract any W-4 allowances (2):        ($667)    
Adjusted wage:                $4,040
From % withholding table(p22)        ($192)
$3,848  This is your Colorado taxable income

Multiply by 4.63%              x .0463      $178.16  Actual amount of withholding per month