relocation to California from Canada
 

Hi,
I will be relocating to California from Canada in about a years time. In order to dertemine what standard of living I can afford, can anyone tell me approximately what percentage of tax (state and federal or however it works) I will pay on about $35 000 - 45 000?
Thanks

About 8% or so (state)I believe. Hopefully someone else here can be more precise.

What part of Canada are you in? I had friends from Canada(originally from England) that moved to California due to work with the intention of returning to Canada within five years. They never did, they loved California, especially the weather. I hope you like it here too.

One thing I might ask is, have you checked out the cost of housing in California? It is very very expensive. A lot of people from other areas go into sticker shock with the realestate prices here (sales and rentals). If you have not looked into this you might like to go to www.realtor.com to get an idea of what you will be facing.

At that income level, federal income tax will be in the 15-20% range, assuming a standard deduction (as opposed to itemized deductions) and no dependants. Social security tax is 6.2% of earned income if you are salaried and 12.4% if you are an independant contractor, on all earned income up to $90,000 in 2005. Medicare tax is 1.45% (salaried) or 2.9% (independant contractor) of earned income with no upper limit.

The state of California has a sliding income tax scale and I would guess at that income level, your tax rate will be in the 5-6% range.

If you look at the tax tables from the federal or state government and, as an example, you are in the 28% bracket for federal, that does not mean you pay 28% of all your income. Both California state and federal or on a sliding scale so you pay lower taxes on your first taxable dollars and higher rates as your income increases.

Not so for Social security and Medicare. You pay the stated percentages on all earned income.

I made a distinction between earned income and taxable income. State and federal taxes are levied on most sources of income (wages, interest, dividends, capitol gains, etc). Social Security and medicare are levied on only earned income (wages).

The actual information for 2004 is available at:
Federal www.irs.gov click forms and publications and enter instructions 1040 2004

State do a google California state income tax there are 3 or 4 links on the first page

M

don't forget health care too. if your employer isn't covering it, i think my premium was about $300/month.