Originally Posted by AtlantaTaxExpert
Assuming you file as a single person and can claim only your personal exemption and the standard deduction, your federal tax will be $6,939 on $50,000 in annual income. Texas has no state income tax.
You will also be liable for Social Security (at 6.2%) and Medicare (1.45%), which tax at the flat rates noted above.
You can reduce your income tax by investing $4,000 in a traditional IRA, but only if you cannot participate in your employer's retirement plan, which you probably cannot until you have been with the company for a few years. If you can stand paying the income tax noted above, you should actually go woth a Roth IRA. It generates NO immediate tax benefit, but it grows tax-free. That allows it to be a great retirement benefit if you leave it alone.
Thanks a lot for the effort. One more thing. The final figure of tax in % to my total income will be 13.878 (( 6939/50000) * 100 ) + 6.2 + 1.45 = 21.528 % of $ 50,000.
Is this correct ? These figures are applicable on H1B or not ? As I am having H1B.
Thanks & Regards