Today’s Bwog Finance column meshes a traditional Back Of The Envelope article with our novel Bwog Finance series. We’re going to give you a rough estimate of how to know how much money you’ll *actually* make this summer after taxes are deducted from every paycheck, and how much of a return you *might* get. Remember to send column topics to firstname.lastname@example.org.
Writing this column wasn’t my idea, but I’m gonna give it my best shot: how to know how much taxes will be deducted from your paychecks, and how much $$ you might get back come spring 2019, using basic math and some help from the internet.
Let’s say you make $15/hour and you work 30 hours a week. That’s $450/week. Woohoo!
Let’s say there are 4 weeks in a month (even though for some months, it might be less!). 4 x $450 is $1,800. LIT. That’s just enough for one half of a studio apartment in SoHo. But wait…
If you make $5,400 for the whole summer (3 months x $1,800), according to smartasset.com, because of FICA, you will owe $413 in taxes. FICA, or the Federal Insurance Contributions Act, goes toward social security and Medicare, which Trump hasn’t managed to get rid of (yet).
You’ll also have $30 withheld each month for federal taxes. You might also have money withheld for New York State taxes, to cover things like NY’s new “Paid Maternity Leave.” But you should get those taxes refunded next spring…
Unless you make more money during the year! This calculation isn’t counting taxes you might owe based on other income you earn throughout the year. So…you may need to re-evaluate that 1/2 of a studio apartment in SoHo and go for something a little closer to MoHi, or else venture into Brooklyn or Queens.
The point is, what you expect to make this summer might end up being a lot less than you thought! Unless you have an under-the-table gig, like babysitting.
Does this apply to things like grants? Yep. If you get a grant from the school, that’s still taxable income. What about stipends? That too.
If this newfound tax knowledge changes your summer plans, have no fear. We’ve composed an easy guide to creating a summer budget.
Photo By 401(K) 2012, via Wikimedia Commons