Information Technology
Can you help me understand this Excel question?
For this project, you will set up a budget that will allow you to live the type of life you would like based on the career path you have chosen. Using the U. S. Governments Occupational Outlook Handbook, you will find a career the interested in related to your major. Use the website to find the median yearly income for your career.
After you have found the median income for your career, you will build a worksheet to house your budget. Your worksheet should be well organized and easy to read. Based on your income, you will need to calculate your net income after taxes. The following chart will help you figure out what your income will be after taxes.
Federal Tax Brackets and Rates, 2018
|
Rate |
For Unmarried Individuals, Taxable Income Over |
For Married Individuals Filing Joint Returns, Taxable Income Over |
For Heads of Households, Taxable Income Over |
|
10% |
$0 |
$0 |
$0 |
|
12% |
$9,525 |
$19,050 |
$13,600 |
|
22% |
$38,700 |
$77,400 |
$51,800 |
|
24% |
$82,500 |
$165,000 |
$82,500 |
|
32% |
$157,500 |
$315,000 |
$157,500 |
|
35% |
$200,000 |
$400,000 |
$200,000 |
|
37% |
$500,000 |
$600,000 |
$500,000 |
You will need to calculate the Federal and State Tax withholdings to deduct from your Gross Income. The Federal withholdings should be calculated based on the tax brackets displayed above. To find the amount of state taxes that you will need to pay, please go to https://www.tax-brackets.org and look up the state you plan on residing in.
Guidelines for figuring out your Social Security and Medicare taxes are as follows:
For 2018, an employee will pay:
a. 6.2% Social Security tax on the first $128,700 of wages (maximum tax is $7,960.80 [6.2% of $128,400]), plus
b. 1.45% Medicare tax on the first $200,000 of wages ($250,000 for joint returns; $125,000 for married taxpayers filing a separate return), plus
c. 2.35% Medicare tax (regular 1.45% Medicare tax + 0.9% additional Medicare tax) on all wages in excess of $200,000 ($250,000 for joint returns; $125,000 for married taxpayers filing a separate return)
On a salary of $128,400 (or more), an employee and his employer each will pay $7,960.80 in Social Security tax in 2018.
Once you have deducted all taxes, you will have the figure you need to begin planning your budget.
Your budget should be broken down by month. The budget should include Housing, Utilities, Food, Transportation, Clothing/Personal items, Medical Care, Entertainment, Credit Card Expenses, Savings, and Miscellaneous Expenses.
When calculating your budget, keep these things in mind:
· A need is something you must have to survive, such as food, shelter and clothing.
· A want is something you desire or would like to have or do.
· Fixed Expenses are those expenses that do not change from month to month.
· Variable costs are those costs that change from month to month and are more difficult to budget for on a monthly basis.
· Housing expenses will be the largest portion of your budget. Experts recommend spending no more than 25 to 30 percent of your budget on housing expenses.
· Most experts say your transportation costs should be 10 to 15 percent of your monthly budget.
· Food costs should be about 10-15% of your net monthly income.
· In addition to clothing, personal items include things like toiletries, laundry, haircuts, etc. Personal/clothing items will run about 2-10% of your monthly income.
· Utilities include things like gas, electricity, telephone, cell phone, cable or satellite television, water, etc. Gas and electricity may already be included in your rent if you choose to rent an apartment or house but you still need to research this information. Experts say you should budget 5 to 10 percent of your net income for utilities each month.
· Entertainment must be included in your budget because realistically, you are not going to sit at home, you will go out and spend money on yourself and possibly your friends.
· The miscellaneous category will include out-of-pocket expenses, convenience items, incidental home expenses, vacations, etc.
· Health insurance premiums will vary depending on your circumstances. For this assignment, you will assume that premiums for individual coverage averaged $321 per month while premiums for family plans averaged $833 per month and include that in your budget.
As the final part of this project, you will create a PowerPoint detailing your chosen career and include a chart displaying an overall summary of your budget. Watch the following video for tips on building better presentations.
