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Learning, Sharing, and Teaching => Taxes => Topic started by: shortduck on October 09, 2019, 07:08:14 AM

Title: basic question: How to calculate take away home pay or net pay using 1040 form ?
Post by: shortduck on October 09, 2019, 07:08:14 AM
Hello

I am in the process of creating a excel sheet with my income and expenses.

I get W2 from my work and so does my wife. I wanted to calculate my 2018, net income in other words my income minus after all my taxes.

I see that on Line 6, it has all the income.
and Line 15 has total federal taxes.

So is this as simple as Line 6 - Line 15 ?

If yes then, does the Line 15 has all of the following ? Federal income tax + Social security tax + Medicare tax ?

From this I will deduct my state tax and my local city tax.

please let me know or if you have any website that tell me this ?

Solution:

Take home Income = 1040 Line 6 [total gross income] - 1040 Line 15 [total federal taxes] - Social Security Tax [W2 box 4] - Medicare Tax [W2 box 6] - State Tax [if any] - City tax [if any] - any other local tax [if any] + FSA

Title: Re: basic question: How to calculate take away home pay or net pay using 1040 form ?
Post by: RWD on October 09, 2019, 10:20:27 AM
1040 is only for federal taxes. Don't forget about state taxes. I don't think Line 15 includes SS/Medicare tax, but I can't remember for sure.

You may find it easier to use dedicated accounting software like GnuCash (https://gnucash.org/) instead of Excel.
Title: Re: basic question: How to calculate take away home pay or net pay using 1040 form ?
Post by: seattlecyclone on October 09, 2019, 02:08:54 PM
Line 15 is your total federal income tax, before any refundable credits. This also doesn't include social security tax, Medicare tax, or state taxes. To figure out your total, start by subtracting Line 17 of your 1040 from Line 15, then add the social security and Medicare taxes from your W-2s, plus any state income taxes you paid.
Title: Re: basic question: How to calculate take away home pay or net pay using 1040 form ?
Post by: MDM on October 10, 2019, 12:00:40 AM
I am in the process of creating a excel sheet with my income and expenses.

I get W2 from my work and so does my wife. I wanted to calculate my 2018, net income in other words my income minus after all my taxes.
Feel free to take whatever you want from the case study spreadsheet (http://forum.mrmoneymustache.com/forum-information-faqs/case-study-spreadsheet-updates/) calculations for your own use. :)
Title: Re: basic question: How to calculate take away home pay or net pay using 1040 form ?
Post by: shortduck on October 10, 2019, 05:38:14 AM
Line 15 is your total federal income tax, before any refundable credits. This also doesn't include social security tax, Medicare tax, or state taxes. To figure out your total, start by subtracting Line 17 of your 1040 from Line 15, then add the social security and Medicare taxes from your W-2s, plus any state income taxes you paid.

Thanks this is most accurate answer and helped me to understand.

I want reiterate what you have said: [I have Line 17 = 0 ]

Take home Income = 1040 Line 6 [total gross income] - 1040 Line 15 [total federal taxes] - Social Security Tax [W2 box 4] - Medicare Tax [W2 box 6] - State Tax [if any] - City tax [if any] - any other local tax [if any]

Can you or someone else confirm this ?
Title: Re: basic question: How to calculate take away home pay or net pay using 1040 form ?
Post by: shortduck on October 10, 2019, 06:29:42 AM
I am in the process of creating a excel sheet with my income and expenses.

I get W2 from my work and so does my wife. I wanted to calculate my 2018, net income in other words my income minus after all my taxes.
Feel free to take whatever you want from the case study spreadsheet (http://forum.mrmoneymustache.com/forum-information-faqs/case-study-spreadsheet-updates/) calculations for your own use. :)

Thanks
Title: Re: basic question: How to calculate take away home pay or net pay using 1040 form ?
Post by: MDM on October 10, 2019, 10:10:14 AM
Line 15 is your total federal income tax, before any refundable credits. This also doesn't include social security tax, Medicare tax, or state taxes. To figure out your total, start by subtracting Line 17 of your 1040 from Line 15, then add the social security and Medicare taxes from your W-2s, plus any state income taxes you paid.

Thanks this is most accurate answer and helped me to understand.

I want reiterate what you have said: [I have Line 17 = 0 ]

Take home Income = 1040 Line 6 [total gross income] - 1040 Line 15 [total federal taxes] - Social Security Tax [W2 box 4] - Medicare Tax [W2 box 6] - State Tax [if any] - City tax [if any] - any other local tax [if any]

Can you or someone else confirm this ?
That looks correct - if you have no "flexible spending accounts" for medical, child care, commuting, etc. 

You also have to decide how you are treating 401k, tIRA, HSA, etc., contributions.  Are you counting those as "income" or not?
Title: Re: basic question: How to calculate take away home pay or net pay using 1040 form ?
Post by: shortduck on October 10, 2019, 12:12:12 PM
That looks correct - if you have no "flexible spending accounts" for medical, child care, commuting, etc.

ahhh. I forgot to add my FSAs. good point. Thanks.

You also have to decide how you are treating 401k, tIRA, HSA, etc., contributions.  Are you counting those as "income" or not?

no I am not counting them as income. I just wanted to wanted to how much came to my bank a/c.

Basically, I am trying to analyze what % of expense do I have.