physician incomes after taxes and expenses

[IMGforNeuro]

hi guys,
i posted this at another forums but did not get a response. I hope i get a reply here since this forum deals with economic issues.
If a physician earns a 200k salary, then how much does he actually get after deduction of taxes , social security , etc.
Secondly , if you buy a house , then is the entire monthly mortgage payment or only the interest on the loan , exempt from tax.
What all expenses are exempted from tax?

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[Andrew_Doan]

The answer to your question depends on your tax shelters. Also, only the interest on your loan from a mortgage is tax deductable. For the sake of answering your question, I'm going to assume no tax shelters and use the IRS calculator and FICA tax calculator for $200K/year for a SINGLE individual (self-employed):

http://www.irs.gov/individuals/article/0,,id=96196,00.html
http://www.planningtips.com/quikguide/2003ficarates.html

You will owe in Federal Tax: $51,137
You will owe in FICA Tax: $16,588 (estimate)
State Tax is usually 6%-9% (some states don't have state tax): $15,000 (http://www.taxfoundation.org/individualincometaxrates.html)

Total estimate Tax Burden for $200K/year income: $82,725

NET INCOME: ~$117,275/Year or ~$9770/month

 

[JohnnyOU]

Originally posted by Andrew_Doan

Total estimate Tax Burden for $200K/year income: $82,725

NET INCOME: ~$117,275/Year or ~$9770/month [/B]

Man, that is depressing... 42% of your income is gone and that doesn't include the additional 8-9% more taxes for anything you need to buy (food, clothes, etc).

Johnny

 

[DrMom]

Originally posted by JohnnyOU
Man, that is depressing... 42% of your income is gone and that doesn't include the additional 8-9% more taxes for anything you need to buy (food, clothes, etc).

Johnny

Yup. Welcome to the real world.

 

[JohnnyOU]

Originally posted by DrMom
Yup. Welcome to the real world.

Well I just turned 35 and I've already been working for 23 years and paying uncle sam... I just didn't realize the "real world" was putting the screws to their physicians to that extent.

I'd hate to be one of those who are in it mainly for the cash

Out of curiousity, would we who end up making around 170-200k be those people Mr Kerry keeps saying should be taxed even more ?

Johnny

 

[DrMom]

Originally posted by JohnnyOU
Well I just turned 35 and I've already been working for 23 years and paying uncle sam... I just didn't realize the "real world" was putting the screws to their physicians to that extent.

I stand corrected.

 

[edmadison]

Originally posted by JohnnyOU

Out of curiousity, would we who end up making around 170-200k be those people Mr Kerry keeps saying should be taxed even more ?

Johnny

Not only that, wait 'til you see what the single payor health care system will pay you per year.

Ed

 

[JohnnyOU]

That sounds scarey too.

All in all though, I shouldn't complain too much... I really do feel fortunate to even be back in school and hopefully starting med school before too long.

Plus I've had jobs where I got paid $10/hr to do something I hated... so I'll be happy as can be, making pretty good money doing something I love.



Johnny

 

[dstn2bmd]

But in reality do you plan on being a bachelor your whole life.

For me

1. married
2. 2 kids
3. own a home
4. invest in IRA
5. give to charity (1000/yr)
6. medical dental expenses
7. etc

For making 204K my income taxes are 15K

Deduct, deduct, deduct......


Heb

 

[Andrew_Doan]

Originally posted by dstn2bmd

For making 204K my income taxes are 15K

Deduct, deduct, deduct......


Heb

This is the key. Put a large chunk of money away in tax deferred retirement accounts!

I'd love to see how you can reduce your total tax burden (federal, state, & FICA) to $15K, however.

Good luck!

 

[raptor5]

I'd love to see how you can reduce your total tax burden (federal, state, & FICA) to $15K, however.

You can't. Not on 200K. That is unless you have more children than Bin Laden's dad. State and FICA will be more than 15K. The only thing you can do is reduce your federal tax burden. But also to itemize, your deductions need to be larger than the std. deduction. For me I was all excited to make some killer deductions after buying a house. Needless to say the std. deduction was more and I did not get one red penny back for the mortgage interest I paid.

I say:
if you have anything you do not want give it to me and I'll write you a receipt for a charitable donation.
Get the highest interest rate possible for a mortgage. More interest paid = more money back (hopefully you know I am kidding)

 

[hillofbeans]

move to Texas

no state income tax (for now)

 

[Andrew_Doan]

Originally posted by hillofbeans
move to Texas

no state income tax (for now)

Or Florida. There's a few others without State tax too!

 

[DrDad]

Originally posted by Andrew_Doan
The answer to your question depends on your tax shelters. Also, only the interest on your loan from a mortgage is tax deductable. For the sake of answering your question, I'm going to assume no tax shelters and use the IRS calculator and FICA tax calculator for $200K/year for a SINGLE individual (self-employed):

http://www.irs.gov/individuals/article/0,,id=96196,00.html
http://www.planningtips.com/quikguide/2003ficarates.html

You will owe in Federal Tax: $51,137
You will owe in FICA Tax: $16,588 (estimate)
State Tax is usually 6%-9% (some states don't have state tax): $15,000 (http://www.taxfoundation.org/individualincometaxrates.html)

Total estimate Tax Burden for $200K/year income: $82,725

NET INCOME: ~$117,275/Year or ~$9770/month

your post is great, but one question... FICA should be less... on 200k it should be 5,394 SS tax and 2,900 for Medicare tax... so it is less, just wondering how you got ~16k

also, as in OK it could be as high as 10% which makes state tax go to 20k

i suppose all of this is somewhat of a wash but it is Still a Butt Load of Money to pay

just checking

DrDad

 

[Andrew_Doan]

Originally posted by DrDad
your post is great, but one question... FICA should be less... on 200k it should be 5,394 SS tax and 2,900 for Medicare tax... so it is less, just wondering how you got ~16k

also, as in OK it could be as high as 10% which makes state tax go to 20k

i suppose all of this is somewhat of a wash but it is Still a Butt Load of Money to pay

just checking

DrDad

My calculations were based on a self-employed physician. You're correct that FICA is less if you're employed by an institution. But for self-employed individuals they pay self-employment tax:

"Self-employed individuals pay a self-employment tax which is the equivalent of FICA tax. For 2003, they will pay a 12.4% OASDI tax (the old age, survivors, and disability insurance tax) on the first $87,000 of self-employment income. A 2.9% Medicare tax is imposed on all net self-employment income. Fifty percent of the self-employment tax paid is deductible."