Need help with a decision

[cardtrick]

I would take it, unless I really felt that I have too much to do and too little time. If you've got hobbies (commitments or things that make you happy) etc that eat up your time at home, then maybe it would make sense to not make the move. If you just get home and bum around, then you will get used to the new schedule. I walk 15 mins to the train and the train ride is another 15 mins. When I look for jobs, I only pick those in the downtown area, so I don't have to buy a car or have long commutes. I hate commutes, especially when I'm driving. It would have to be a huge increase in salary (200K+ base) for me to accept a job in the suburbs.

[dawnwes]

How are you figuring you will pay 42% in taxes?

http://taxes.about.com/od/Federal-Income-Taxes/qt/Tax-Rates-For-The-2013-Tax-Year.htm

Dawn

I tried to put some numbers on for comparison purposes.

I used $0.55 a mile for cost of commute. It's an additional 50 miles per day. If I work 235 days per year, I would drive an additional 11,750 miles. That brings my additional commute expense $6462.

If I pay 42% taxes (I won't have to pay social security on this amount), my NET overall increase is $7458

That seems like pennies for a $24K increase. Is the 55 cents too high? My car gets 38 mpg. The commute is all interstate. I drive a Toyota Corolla so it is not an expensive car either to maintain or to depreciate.

What am I missing?

[Reggie]

So maybe a little higher than 42%. I was using the old 25% federal rate.

I have federal, city, state, school and Medicare. I'm over the limit for social security on that addtl 24k.

45% will be closer .

[ua_guy]

It nets you more money, it gets you out of management and into a better work/life balance, and the commute is longer but seems totally manageable by your description. You've already got the right car for it. What's not to like?

Have you ever paid a 42% effective tax rate from normal income and retirement investment strategy? Probably not. You're over-estimating there.

Also, $0.55/mile for a Toyota Corolla? That means at 150,000 miles on the odometer, assuming the car is worth absolutely nothing (which it won't be), you'll have spent $82,500. That's ridiculously high for a car that probably priced in the high teens- low twenties, brand new.

[Reggie]

Wouldn't the only tax rate that matters, be the tax on the last $24k of income?

I'm trying to decide on whether it is a better work/life balance. That is what is making the darn decision so hard. You are right about the car, the rate I'm using is way too high.

[dawnwes]

You have a federal and a state tax. How are you paying city and school taxes? Aren't those part of your property taxes and not dependent on your salary?

Medicare should not go up significantly either.

Are you also figuring in deductions? Or are you just assuming you will pay the full amount?

You really need an accountant to figure out the exact amount if you can't.

So maybe a little higher than 42%. I was using the old 25% federal rate.

I have federal, city, state, school and Medicare. I'm over the limit for social security on that addtl 24k.

45% will be closer .

[Reggie]

School and city taxes are in addition to my property taxes. It depends where you live. My property taxes are fairly low. I pay $4400 per year on my main home. I itemize deductions so there are no additional deductions on the last $24k. My neighbor's wife is a CPA I will ask her.

[Reggie]

CPA friend advised that my tax rate would be closer to 45% for that last $24k. She also said that I was painfully close to Obama's penalty threshold for Obamacare. If I go over a certain income, I will pay .9% Medicare penalty and 3.8% penalty on interest income which includes rental income.

After that information, I turned it down right away. I do not want those penalties to pay. I really think they are sticking it to the working class ! I'm just thankful I'm not married, the threshold is considerably less for married couples.