U.S. Department of Labor, Bureau of Labor Statistics, Occupational Employment Statistics, May 2013 data.
U.S. Department of Labor, Wages, Minimum Wage.
Income has not been adjusted for inflation.
Kwelia.com which uses statistical models to determine theoretical market values for specific units in specific areas down to the census tract level.
A census tract is an area roughly equivalent to a neighborhood and it is defined by the U.S. Census Bureau.
While tax code and regulations are very complex and an accurate tax calculation falls outside of the scope of this this tool, we have striven to provide a conservative tax estimate making a number of assumptions to ease usage. Crucially, we have tried to err on the safe side and most likely the tax estimate provided by this tool will result in higher taxes reported compared to an accurate calculation of actual taxes.
Tax estimate is as follows:
- Number of people in household = Number of adults plus children selected.
- Number of earners = Number of occupations selected.
- Standard deduction = $6,200 x number of earners.
- Personal exemption = $3,950 x number of people in household.
- Taxable income = wages - standard deduction - personal exemption.
- Federal Income Tax is calculated by taking the taxable income and applying the following tax brackets:
||Married filing jointly
||$0 to $9,075
||$0 to $18,150
||$9,075 to $36,900
||$18,150 to $73,800
||$36,900 to $89,350
||$73,800 to $148,850
||$89,350 to $186,350
||$148,850 to $226,850
||$186,350 to $405,100
||$226,850 to $405,100
||$405,100 to $406,750
||$405,100 to $457,600
If a single occupation is selected, the "Single" column is used, otherwise the "Married filing jointly" column is used. The IRS provides two additional tax brackets (Head of Household and Married Filing Separately) that may result in a more favorable tax estimate.
- Social Security Tax is calculated as 6.2% of each member income with a taxable income cap of $117,000 (for each member separately).
- Medicare Tax is calculated as 1.45% of the combined income up to $200,000 (for a single occupation) or $250,000 (for two occupations) and 2.35% beyond that.
- Only Federal income tax based on wages is estimated
- No capital gains, property, state nor local taxes. Note that is no State income tax in Texas and property tax is not used because housing is focused on rentals.
- No support for itemized deductions.
- For estimating the standard deduction the tool assumes there are no over 65 or older, or blind, or whether an exemption can be claimed by another taxpayer.
- No head of household, of married filing separately supported.
U.S. Department of Agriculture's Food plans: Cost of Food We calculate food cost by combining the individual cost for each household member (depending on age and sex) and the selected food plan.
The food plans represent a nutritious diet at four different cost levels with all meals and snacks are prepared at home:
- Thrifty Food Plan: It is the cheapest food plan and serves as a national standard for a nutritious diet at a minimal cost and is used as the basis for maximum food stamp allotments. More information here.
The remaining three plans include market baskets specifying types and quantities of foods that people could purchase and prepare at home to obtain a nutritious diet at the remaining three cost levels:
- Low-Cost Food Plan: represents food expenditures in the second from the bottom quartile of food spending.
- Moderate-Cost Food Plan: represents food expenditures in the second from the top quartile of food spending
- Liberal Food Plan: food expenditures in the top quartile of food spending.
More information here.
Parents and the High Cost of Child Care: 2013 Report adjusted for inflation.
If you choose stay-at-home spouse we assume, s/he will take care of children so childcare costs are set to $0.
Transportation, Health care, and Utilities
We analyzed U.S. Department of Labor, Bureau of Labor Statistics, Consumer Expenditure Survey, Public Use Microdata, 2012 creating six consumer unit (CU) cohorts:
- Renters (1 member per consumer unit)
- Renters (2 member per consumer unit)
- Renters (3 member per consumer unit)
- Renters (4 member per consumer unit)
- Renters (5 member per consumer unit)
- Renters (6 member per consumer unit)
For each cohort above we further segmented average expenditures by income brackets:
- $15,000 to $19,999
- $20,000 to $29,999
- $30,000 to $39,999
- $40,000 to $49,999
- $50,000 to $69,999
- $70,000 and over
Once we select the cohort and the income bracket (based on the user selection) we calculate the dollar expense for:
- Utilities: it includes both the costs below as reported by renters in the Consumer expenditure survey, specifically:
- Utilities, fuels and public services
- Household operations
- Housekeeping supplies
- Household furnishings and equipment
- Floor coverings
- Major appliances
- Small appliances, miscellaneous housewares
- Miscellaneous household equipment
- Transportation: it includes all Transportation costs as reported by renters in the Consumer expenditure survey except Vehicles Purchases, specifically:
- Gasoline and motor oil
- Other vehicle expenses
- Public transportation
- Healthcare: it includes all Health care and Personal care products and services as reported by renters in the Consumer expenditure survey.
Special thanks to Anthony Damico for his tools for analyzing survey data with R.
The results for all 6 cohorts are available here.
The estimates provided by this tool are summaries to be used for educational purposes only. Do not rely on them as a determination of taxes, benefits, wages, etc. The tool uses data from multiple sources which may not reflect faithfully your lifestyle or local conditions.
- Only house rentals are supported (no option for buying or already owning a house). Hence, property tax is not factored in.
- Tax estimates are based on the tax assumptions above and as such are just a rough estimate.
- Childcare costs only covers 13-year-old children and below (guidance provided by Child Care Aware® of America).
- No education costs are supported.
- Food estimates assumes all food is prepared at home.
June 25th, 2014
Added "Stay at home" spouse. When choosing this one we assume the stay-at-home spouse will take care of children so child care costs are set to $0.
April 28th, 2014
Added ability to enter custom income.
April 11th, 2014
Added minimum wage.
April 9th, 2014
April 7th, 2014
First version. Only Texas supported.
Feedback & Questions
Please contact Andres Torrubia at andresto at fixr dot com if you have any questions or feedback.