Calculating state taxes and take home pay | Taxes | Finance & Capital Markets | Khan Academy

Created by Sal Khan.

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Finance and capital markets on Khan Academy: Benjamin Franklin (and several other writers/philosophers) tells us that "In this world nothing can be said to be certain, except death and taxes." He's right. This tutorial focus on personal income tax. Very important to watch if you ever plan on earning money (some of which the government will take for itself).

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[nonchalantd]

Admit it. You're in love with Khan's voice. Bahaha.

[SillyEddyPhotography]

It's nice.. It's literally a case of: Here is your deductible (tax code allowance), here is your income. You pay this in tax and this in insurance and this is what you take home. I never fill out a tax form (because HM Revenue & Customs works it out for me) and they send me money back if I have paid too much. It's different for businesses, naturally, but for most people it's just "turn up and go to work".

[schaapveld]

great videos, note, you have 16980 in the 2% row and 16890 in the 4% row

[StephenRichmond]

Well your income is split and each section is taxed at different levels- like in the US.

The first part is not taxed, the next however much is taxed at 20% and if you make enough then anything over the top tax band is charged at 45% I don't know the tax bands off the top of my head but it is basically the same as the US but with different percentages.

Hence the lib dem policy of increasing the tax allowance to £10, 000. That would affect everyone on any income, not just those earning under 10K

[Jindsing]

Is state tax based off the state you permanently reside in, or the state the work is performed in?

[SillyEddyPhotography]

I've heard that US taxes were much lower than in the UK, but ours would give you a take-home value equivalent of $37, 840 at that level, so not too bad. The method seems very long winded though... You have to work this out for yourself? For us it is done automatically on pay checks and there aren't multi-stage tax levels - Just the one your pay is at. At least, I haven't known it to be different to that!

[StephenRichmond]

Sal forgot to add in the deduction in the previous video so take home pay is $10, 000 higher than he says here. That gives an effective tax rate of 23% so much lower than it seams.

[StephenRichmond]

There are definitely multi-stage tax levels in the UK. Otherwise it benefits the rich too much. we have fewer though. You pay nothing on the first section of your income, then 20% on the next and finally 45% on anything above that.

[abdoabdo]

could you provide me with a video explaining the hyperbolic functions?? ...and where did they come from????

[EdwinCloud]

is the state tax calculated where you live?

what if I am a 1 man company. I live in florida, my client lives in new york and my company was incorporated in delaware. What state taxes should I pay? all of them?

thanks

[HigherPlanes]

This would have come in so handy five years ago when I stopped paying taxes.

[crb]

I live in Fl so thankfully I wouldnt know.

[nonchalantd]

I bet that the credits are adjusted for inflation, so policy makers are not concerned with round numbers. Rounding the number would not make it easier to prepare an income tax return anyway.

[JacobDavidCCunningham]

This is such a cool video. I also love your floating calculator thing. I don't know what to call it, an emulator? Anyway... A computer within a computer ha.

I wanted to specifically comment about the percentages shown top right corner of your video in the initial up to 1:46. I wanted to ask if you knew the reason why this was done. Also how it was derived, is there a formula that determines those numbers / percentages?

[pgrath]

He mistyped the 4% portion of his taxes. The lower limit of the he typed $16, 890, but he should have typed $16, 980

He's over-paying his taxes by nearly $4!

[PassportBrosBusinessClass]

I have my own small business, lawyer and the best Jewish CPA I could find.

[MarioLoco]

This is crazy...$50k is not a lot of money, then to take $12k off of that. No wonder the poor are getting poorer

[SillyEddyPhotography]

Not quite what I meant. The tax rates aren't cumulative, are they? You pay your tax rate and don't have to include taxes from other bands.

[zackmouses]

HOLY S***, thank god we don't have any taxes in the GCC countries what so ever...

[SnakeBP]

Ok how about something a little smaller like $100 into tax money for the State and fed. So please let me to know. by the way I live in Indiana USA