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William Perez

Am I Paying Too Much Tax?

By April 11, 2006

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Today's tax question comes from A. Linn in Minnesota. He asks:

"I'm 17 years old and making around $8000 a year at my partime job. All of my friends that have jobs only have to pay social security. This year I got half of my state and federal back, and I'm wondering if i should be getting it all back."

I ran a quick tax calculation based on your scenario. I made one crucial assumption about your tax situation. I assumed that someone else can claim you as a dependent (such as your parents).

Based on this scenario, you would owe taxes on the income over $5,000. The first $5,000 of income is tax-free to you because you are entitled to claim a standard deduction.

You would fall into the 10% tax bracket, which runs from $0 to $7,300 of taxable income for single people. So your federal tax would be about $300.

If you cannot be claimed as a dependent, then you would pay zero federal tax. That's because you would be entitled to claim a personal exemption for yourself.

Your friends who are paying only Social Security and Medicare taxes might have income less than you, or might be able to claim their own personal exemptions. It is often very hard to compare your tax situation to someone else's tax situation since there can be significant differences that you might not know about.

Throughout the tax season I will be answering one tax question per day. Do you have a question? Visit the Ask a Tax Question page. Disagree with my answers? Post your comments in the Tax Forum.

August 3, 2007 at 6:04 pm
(1) Yovany says:

Hey Will,

I’m a little bit confused when it comes to deductions made to my paycheck due to taxes. Roughly, I make about $1,000 bi weekly. This pay period I received $1,000 from my normal payout, worked 72 hours of overtime entitling me another $900 and received $952 from commissions thru sales. When I received my pay stud, I only got paid $2,027!!! That hurts! I’ve noticed others who only get about $300 taken out in taxes! What is the point in me working so hard if I’m going to lose my money to the government anyways?! Please advise. Thanks in advance.

November 27, 2007 at 7:27 pm
(2) Alvaro Crow says:

I relly hope you can help me!I make $800 gross wekly,i used to get after taxes $630,but now i get pay every other week and the gross is $1600,but im getting only $1150 after taxes.That is $450 taxes for two work week,its that fare?Please help me…

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