Making a Tax Spreadsheet

[Special Delivery]

I realize there are prepared spreadsheets out there, but I decided to make my own as part of my financial education and in anticipation of what changes may be coming in 2022. While setting up the spreadsheet, I had some questions:

1. When calculating Social Security tax, are both my wife and I are treated as separate, with up to 6.2% of $147,000 each ($9,144 times 2)? This doesn't seem to apply to Medicare when filing joint.

2. Is there any deducting State Income tax from what is Federally taxable (or vice versa)? When I was much younger I thought this used to be a thing, however the rules seemed to have changed, and it appears most people just take the standard deduction...

3. Are Federal Income Taxes the only taxes affected by AGI (standard deductions, 401k contributions, tax loss harvesting), or are Social Security and Medicare deductions also effected? I assume for state income tax, it varies by state...

Thanks in advance for the answers.

[JBME]

I realize there are prepared spreadsheets out there, but I decided to make my own as part of my financial education and in anticipation of what changes may be coming in 2022. While setting up the spreadsheet, I had some questions:

1. When calculating Social Security tax, are both my wife and I are treated as separate, with up to 6.2% of $147,000 each ($9,144 times 2)? This doesn't seem to apply to Medicare when filing joint.

2. Is there any deducting State Income tax from what is Federally taxable (or vice versa)? When I was much younger I thought this used to be a thing, however the rules seemed to have changed, and it appears most people just take the standard deduction...

3. Are Federal Income Taxes the only taxes affected by AGI (standard deductions, 401k contributions, tax loss harvesting), or are Social Security and Medicare deductions also effected? I assume for state income tax, it varies by state...

Thanks in advance for the answers.

1) Yes. It does apply to medicare too when filing joint...you are both taxed at 1.45% and then there's a surtax if one of you makes above a certain amount
2) SALT limitation due to trump tax cuts in 2017. You can only deduct $10k in local/state taxes and that's if you file Schedule A.
3) You can find this by looking at a schedule 1: https://www.irs.gov/pub/irs-pdf/f1040s1.pdf

[ENT Doc]

Regarding the Medicare taxation, careful of the Additional Medicare Tax that kicks in above 200k. Your employer is required to withhold this tax regardless of MFJ status, which should make it kick in above $250k. So you’ll have to reconcile this over-withholding on your taxes.

[Special Delivery]

Regarding the Medicare taxation, careful of the Additional Medicare Tax that kicks in above 200k. Your employer is required to withhold this tax regardless of MFJ status, which should make it kick in above $250k. So you’ll have to reconcile this over-withholding on your taxes.

Hm. Taking this an extra step further, if my wife is also working, both of our checks would have this tax (0.9% I'm assuming) held starting at $200k which means it would have to be reconciled for both. That's annoying.

Or does it become a situation where we will have to come up with the 0.9% extra on one of our incomes since both our initial $200k didn't have this added tax...

[jacoavlu]

you’d be way better off to just use turbotax and or something like excel1040 for anything beyond very rough guesstimation

i enjoy spreadsheets more than the average person. and probably enjoy tax more than the average person

but i wouldn’t want to go too far working on my taxes de novo

[ENT Doc]

Hm. Taking this an extra step further, if my wife is also working, both of our checks would have this tax (0.9% I'm assuming) held starting at $200k which means it would have to be reconciled for both. That's annoying.

Or does it become a situation where we will have to come up with the 0.9% extra on one of our incomes since both our initial $200k didn't have this added tax...

It only applies after 200k on the individual level. But since employers don’t take account of marital status if you’re married that means too much ends up getting withheld.