I think this calculator is flawed. I’m not a CPA, but it looks like they are making a huge mistake in the calculation.
Federal tax withholdings are calculated based on Taxable income, not Gros income.
Taxable income is Gross income minus pre-tax deductions like 401K contributions and Company Health Insurance premiums.
Personally, I shell out about $6K and $6K per year for 401K Contribution and Health insurance, respecitvely.
If I make 60K, the taxable portion remaining is 48K. This is what I think needs to be used for the calculator to be accurate, sans itemizing.
If I understand correctly, neither 401K conributions, nor Insurance premiums will be treated any differently than they are now.
Someone who knows more can correct me, but I believe the calculator is incorrect in asking for Gross Pay instead of Taxable Income.
The other wildcard would be the SALT deduction, In or Out, and limited to 10K/year.
If the SALT deduction is on top of the Stndard deduction, sweet. If it is part of an itemized return, that is still OK for many people.
Thoughts?
I would suggest using the Adjusted Gross Income amount from your tax return. That amount will have already applied any 401k contributions or pretax adjustments.