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Why is it that the more I earn, the higher percentage of federal withholdings they take? (lemmy.world)

submitted 9 months ago* (last edited 9 months ago) by LemmyKnowsBest@lemmy.world to c/personalfinance@lemmy.ml

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One paycheck I earned only $77 and the govt withheld 9% of it.

Then I earned $2,000 and they withheld 26% of it.

Is everyone else experiencing this?

The less you earn, the less percentage-wise the govt withholds? The more you earn, the greater percentage they withhold?

At this rate, I fear that if I hypothetically would earn $8,000, they would withhold 100% of it. Do you see where this is going?

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[–] sugar_in_your_tea@sh.itjust.works -1 points 9 months ago* (last edited 9 months ago) (1 children)

What's up with the down votes? This is literally the kind of content we should be boosting here. OP is clearly struggling financially and has probably never been taught how taxes work, and the primary goal should be to help people learn to manage their finances, not down vote because someone asks a tricky question.

I provided some info down thread, but OP, if you provide some more info (kids, expected annual income, state of residence, IRS garnishment details, etc), I'm happy to walk you through it. There may be a way to get you more cash each paycheck, but I need a lot more details.

[–] LemmyKnowsBest@lemmy.world 0 points 9 months ago

has probably never been taught how taxes work

I worked at H&R Block as a tax preparer for the 2001 tax season 😄 So I do kinda understand taxes even though that was a long time ago and I don't really think or care much about all the things I used to know anymore.

The last place I worked at in Nevada, I kept careful track and noticed 13% government deduction every paycheck. I noted it and figured my finances accordingly. No big deal.

But this California 26% government deduction is blowing my mind. It's outrageous. And someone else in the thread said to rest assured that the govt would never withhold more than 37%. But even 37% max is ridiculous. That's nearly half of our hard work turned into govt slave labor! Now when I'm at work I am consciously bitterly aware that 1/4 days I'm involuntarily working for free 😡