 |
Unlike in the U.S. "how much money do you make?" is a popular question between Chinese, at least it used to be. I remembered one time when I was in Tokyo airport, waiting for my connection to Beijing, a fellow Chinese passenger who was waiting for the same flight started to chat with me. After some introduction of herself, if I remembered correctly, she was about 60 years old, came to Japan to visit her daughter who married a Japanese, her questions came. It started like: "How old are you? Are you married? Where do you live? How long have you been living in the U.S.? What do you do for a living? How much money do you make?" ...... I wouldn't say that I was annoyed by the question, but I was still surprised that a total stranger felt it is o.k. to ask me that question. So I made up a number.
I can do that to a stranger, but I can't do that to my parents, who ask me how much money do I make every year. To them, the number sounds a lot bigger than it really is, because they don't factor in the taxes. For example, assume I make $100K/year, which I don't, after medical deductions, retirement account contributions, and various taxes, it becomes to less than $51K/year. And if you further factor in sales tax, which is 6% here, that becomes to less than $48K/year. How can I explain all that to my parents who never heard of personal income taxes until the 90's? Even I can't believe it until I see it break down like this. No wonder I don't have any money. It all went to the government.
| | $ | Note |
|---|
| Wage | $100,000.00 | Assume $100K/year income |
|---|
| Health Insurance Premiums | $2,000.00 | Assume $2,000 pre-tax deduction | | Dental Insurance Premiums | $200.00 | Assume $200 pre-tax deduction | | Vision Insurance Premiums | $100.00 | Assume $100 pre-tax deduction | | Social Security Wage | $97,700.00 | Wage - pre-tax deductions |
|---|
| 401(k) Contribution | $15,500.00 | Assume $15,500 pre-tax contribution to 401(k) account | | Taxable Wage | $82,200.00 | Social Security Wage - 401(k) Contribution |
|---|
| Social Security Tax | $6,057.40 | 6.2% * Social Security Wage | | Medicare Tax | $1,416.65 | 1.45% * Social Security Wage | | Federal Income Tax | $13,397.50 | From 2007 IRS Tax Table | | State Income Tax | $2,794.80 | 3.4% * Taxable Wage | | Local Income Tax | $822.00 | 1% * Taxable Wage | | Roth IRA Contribution | $4,000.00 | Assume $4,000 after-tax contribution to Roth IRA account | | Property Tax | $3,000.00 | Assume $3,000 Property Tax | | Actual Income | $50,711.65 | |
|---|
|
|
|
