A Sankey chart of my weekly budget is shown below.
The withholdings are calculated by the IRS W-4 tool.
I am expected to be in the 12% tax bracket this year.
I heard that a good rule of thumb is to save a percentage of your income that is equal to your tax bracket each month. Am I supposed to save another 12% on top of withholdings for my taxes at the end of the year?
Image may be NSFW.
Clik here to view.
A quick explanation of things on the Sankey chart:
Tl;dr: Do I need to save an extra 12% of post-withholding income for taxes?
The withholdings are calculated by the IRS W-4 tool.
I am expected to be in the 12% tax bracket this year.
I heard that a good rule of thumb is to save a percentage of your income that is equal to your tax bracket each month. Am I supposed to save another 12% on top of withholdings for my taxes at the end of the year?
Image may be NSFW.
Clik here to view.
A quick explanation of things on the Sankey chart:
- I am a full-time college student with room and board covered, so I have very little expenses
- The internship consisting of half of my income is through a disregarded entity LLC as I am an independent contractor. It is not an employer/employee job and I am not subject to withholding.
- The $47 is roughly 12% of my total weekly post-withholding income.
Tl;dr: Do I need to save an extra 12% of post-withholding income for taxes?
Statistics: Posted by vdg — Thu Feb 22, 2024 7:48 pm — Replies 5 — Views 560
