As you know, the government and your employer cut various taxes from your paycheck without you even touching it. Thus, there is a huge difference between your gross and net income every month. In this guide, we have covered everything you may want to know about taxation in Massachusetts.
Keep in mind that you can always use our Massachusetts paycheck calculator to calculate the net balance you will have after your paycheck. However, you need to provide all the required information accurately to get accurate results.
What Taxes You Must Pay in Massachusetts
Anyone living and generating income in any form in the United States is charged with federal, Medicare, and Social Security taxes. Besides these, you also pay state income tax, which is a flat rate in Massachusetts at 5% no matter how much you make annually.
Moreover, taxpayers in Massachusetts also have to pay FLI, which refers to Family Leave Insurance. In other words, 24.5% of every dollar you are going to generate in Massachusetts will be paid to federal and local governments.
Let’s assume that you are making $70,000 annually. In this case, you will be paying $8,168 in federal income tax. Later, you will be paying $3,400 in state income tax. The Social Security and Medicare taxes will correspond to $4,340 and $1,015, respectively. Moreover, you will be paying $241 for Family Leave Insurance.
This means that you will only get $52,836 although you are making $70,000 as a gross income. Although the average tax rate is 24.5%, in fact, your marginal tax rate is 35%. This is important because your marginal tax rate also affects any additional income you may make, such as your job bonuses.
This means that you, the government, will get $35 off of every $100 you are going to make. Let’s assume that you get two bonuses from your business: $1,000 and $5,000. In this case, you will only receive $650 and $3,250, respectively.
Besides the tax you are paying to the government, your employer will also pay an additional tax for employing you. The employer will be paying $5,775 in additional tax for each employee recruited for $70,000 in annual gross income.
Unfortunately, there is nothing you can do to avoid paying these taxes. However, you can benefit from certain programs and opportunities that the IRS offers. In addition, you can save some tax money by having a good tax strategy.
If you would like to know your net income in your next paycheck, please feel free to use our Massachusetts paycheck calculator whenever you want. Check out other states’ paycheck calculators.
Zrivo Paycheck Calculator
Massachusetts paycheck calculator is a helpful tool for employers to use to calculate the amount of net pay they must withhold from an employee’s check. Employers can enter an employee’s W-4 information, pay rate, and deductions or benefits into the calculator. Employees must also enter their federal and state tax filing statuses. If you’re not sure what your federal and state taxes are, you can look them up on the W-4.
With this calculator, you can determine how much tax your employer has withheld from your paycheck. But these are just estimated numbers, so it would be better to consult a tax professional for advice on your taxes.