Federal And State Taxes

FEDERAL AND STATE TAXES

Dental Hygienist:

A dental hygienist is one of the professions that is highly paid in the united states with a gross salary of 62,430 per year, this salary is the mean wage rate for the profession provided by the united state bureau of statistics, every other employee is required to pay taxes and gross salary minus the taxes give you net salary, the taxes we consider in this profession include social security and Medicare taxes, state taxes and federal taxes.

Gross salary:

The mean gross salary of a dental hygienist is 62,430 per year, this according to the united state bureau of statistics available at http://www.bls.gov/oco/ocos097.htm , because taxes are paid every month we will have to determine the mean salary per month and this will be obtained by dividing the annual mean salary by the number of months per year which is 12,Monthly gross salary = annual gross salary / 12 month

= 62,430/12

= 5202.5

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FEDERAL AND STATE TAXES

Medicare and social security taxes:

Given the monthly gross salary we are in a position to calculate the Medicare and social security taxes, this tax level is obtained by multiplying the gross profit by the tax rate which gives us the tax level.

Tax = gross salary X tax rate

The social security tax is 6.2% and the Medicare taxes is 1.45% this is according to http://www. ssa.gov/pubs/10003.html

, we therefore consider each tax separately and this will be as follows:

Social security tax:

6.2% X 5202.5 = 322.555

Medicare taxes:

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FEDERAL AND STATE TAXES

1.45% X 5202.5 = 75.43625

State tax:

State tax is also deducted from the gross salary in order to get the net salary that a dental hygienist should receive, the state tax for the Arizona state lies between 2.59% and 4.54%, for this reason therefore we get the mean rate of the Arizona rates, these rates were retrieved from http://www.taxadmin.org/FTA/rate/ind_inc.html

, the mean rate will be achieved by adding up the two rates and then dividing the sum by two, this will be as follows:

2.59% + 4.54% = 7.13%

7.13% /2 = 3.565%

For this reason therefore we will consider the state tax as 3.565% which the mean rate of tax in Arizona

. Given the rate of tax as 3.565% we can find the tax level of a dental hygienist in Arizona

and this will be given by multiplying the gross monthly salary by the tax rate, therefore our tax level will be achieved as follows:

5202.5 X 3.565% = 185.4691

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FEDERAL AND STATE TAXES

Therefore our state tax per month is 185.4691.

Federal tax

The federal taxes are determined using a tax table, our tax table was retrieved from http://www

.irs.gov/formspubs/article/0,,id=164272,00.html

, and the table below shows the tax level at each salary range in the country: If income is over

But not over The tax rate is

0

7825

10% of the amount over $0

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FEDERAL AND STATE TAXES

7825

31850

782.50 plus 15% of the amount over 7,825

31850

77100

4,386.25 plus 25% of the amount over 31,850

77100

160850

15,698.75 plus 28% of the amount over 77,100

160850

349700

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FEDERAL AND STATE TAXES

39,148.75 plus 33% of the amount over 160,850

349700

to infinity

101,469.25 plus 35% of the amount over 349,700

The table above was retrieved from http://www.irs.gov/formspubs/article/0,,id=164272,00.html , this therefore means that our salary lies between 0 and 7825 dollars and for thi9s reason we assume that the employee is single and not married because the table above depicts tax rate for single persons in the country, given that the tax rate is 10% then we can find the federal tax which is calculated by multiplying the income level by the tax rate:

5202.5 X 10% = 520.25

Therefore our federal tax level is equal to 520.25.

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FEDERAL AND STATE TAXES

Net salary:

Having determined the tax that is included in calculating the net salary we can now determine the net salary, the net salary is achieved by subtracting the all taxes from the gross salary, in our case therefore the following will be our calculations:

Net salary = gross salary – (Medicare tax + social security tax + federal taxes + state tax)

This can therefore be simplified in the table below:

Tax type

amount

federal

520.25

state

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FEDERAL AND STATE TAXES

185.4691

Medicare

75.43625

social security

322.555

total tax

1103.71035

We can therefore clearly state that the total tax is 1103.71 which includes all the taxes considered in the table above, our net salary will therefore be as follows:

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FEDERAL AND STATE TAXES

gross salary

5202.5

minus

tax

1103.71035

net salary

4098.78965

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FEDERAL AND STATE TAXES

Our net salary in the dental hygiene profession for an average employee is 4098 dollars, this has been obtained by calculating total taxes and then subtracting from the gross salary.

References:

State taxes (2008) Arizona state tax, retrieved on 14th February, available at http://www.taxad min.org/FTA/rate/ind_inc.html

Social security and Medicare taxes (2008) social security taxes and Medicare taxes, retrieved on 14 th February, available at http://www.ssa.gov/pubs/10003.html

BLS statistics government (2008) dental hygienist, retrieved on 14th February, available at htt p://www.bls.gov/oco/ocos097.htm

IRS (2008) federal taxes, retrieved on 14th February, available at http://www.irs.gov/formspub s/article/0,,id=164272,00.html

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