Internal Medicine Residency and Taxes

[Whats_up_doc]

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I don't know that much about financial stuff and I have a question. Let's say for example that as PGY-1 you get a $42,000 yearly salary in program X (as I have seen in a couple of websites), do you get taxed on this money? If so, how much do you have to pay back to IRS or to the Medicine Department if that were the case. Thank you for clarifying.

WUD

 

[Frugal Traveler]

I believe the salaries listed on these websites are gross salaries... and the FIT that will appear on your paycheck isn't a government fitness program.

Usually
- FIT (federal income tax)
- State income tax (depending on where you match)
- Even local tax

Also you have social security payouts as well.

The salary will determine your tax bracket (http://money.cnn.com/magazines/moneymag/money101/lesson18/index3.htm)
- it should be a lower tax bracket with 40 K

 

[Whats_up_doc]

I believe the salaries listed on these websites are gross salaries... and the FIT that will appear on your paycheck isn't a government fitness program.

Usually
- FIT (federal income tax)
- State income tax (depending on where you match)
- Even local tax

Also you have social security payouts as well.

The salary will determine your tax bracket (http://money.cnn.com/magazines/moneymag/money101/lesson18/index3.htm)
- it should be a lower tax bracket with 40 K

Thanks Frugal Traveler. I also read something about Congress trying to pass a law to make residents pay taxes as "employees" or something like that... Thanks again!

 

[Frugal Traveler]

You would have to check with a current resident, but we probably do get taxed!

It would be a dream if residency salary was tax free

 

[jdh71]

Salaries are the GROSS amount paid to you per year by your institution - taxes, insurance, and retirement are all taken out of your check before it comes to you. Generally if you gross $4000/month, you will probably see around $3000 of that "take home", give or take a couple of hundred dollars.

 

[NotAProgDirector]

Thanks Frugal Traveler. I also read something about Congress trying to pass a law to make residents pay taxes as "employees" or something like that... Thanks again!

You're referring to the question of whether residents are students, and hence exempt from paying FICA tax. I posted some summary links on this thread.

 

[Whats_up_doc]

You're referring to the question of whether residents are students, and hence exempt from paying FICA tax. I posted some summary links on this thread.

Thanks aprog. I was wondering if anyone could break down how much do they pay on taxes, car, living expenses, etc as a PGY-1 or 2 from a 40 something salary base. If anyone could be so kind, I just want to have an idea (since I didn' take my Med school ECON 101 course, 😳). If anyone has a fiance that would help even more. Thanks again.

 

[BlazerMed]

Thanks aprog. I was wondering if anyone could break down how much do they pay on taxes, car, living expenses, etc as a PGY-1 or 2 from a 40 something salary base. If anyone could be so kind, I just want to have an idea (since I didn' take my Med school ECON 101 course, 😳). If anyone has a fiance that would help even more. Thanks again.

That's going to vary widely from person to person, even within a single program. A person's take-home is going to depend on their marital-status, tax-withholding, retirement contributions, health insurance premium, etc. Just how much they pay to get around and live is going to depend on distance from hospital, type of car, size of family, size of house, etc.

Google something along the lines of "Take Home Pay Calculator" and you can at least come up with what your net paycheck would be, roughly.

Also, more along the lines of the original post, the University of Florida puts 7.5% of your paycheck into a retirement account instead of taking out 6.2% for FICA. (percentages may be off a little bit, but the general idea is correct.)

 

[Whats_up_doc]

Since this was an anonymous forum I was figuring that someone could actually put some hypothetical or real numbers just for illustrative purposes.

By the way, I was verifying a website which had 45,000 salary and 20% fringe. What does fringe mean? Thanks again.

 

[randomedstudent]

Since this was an anonymous forum I was figuring that someone could actually put some hypothetical or real numbers just for illustrative purposes.

By the way, I was verifying a website which had 45,000 salary and 20% fringe. What does fringe mean? Thanks again.

Ok, I'll bite. My husband and I are both in a midwest internal medicine program and gross pay is roughly 48,000 each. Our take home is just over $3000/month each - this is after all taxes, withholdings, and health insurance. We don't have any retirement plan available at our institution. We don't contribute to any HSA or other pre-tax account. So total we take home roughly $6000/month combined.

Our mortgage for 3 bed/2 bath house is $1092/month

We have no car payments as we are both driving cars over 10 years old which we paid cash for during college

Our bills each month are (this is total for both of us, some may be lower for only one person) - $90-cell phones, $120-cable,internet, $120 avg for gas/electric, $30 for water, $100-car insurance, $300-400 avg for food/dining, $125 avg for car gas, $100- misc entertainment (netflix, online music websites for hubby, etc).

We are paying the full amount on our med school loans as we are able to afford this (we both lived at home during school and took out the minimum loans so total have $165,000 in debt) - this is $1275/month

We generally have a fair amount of other misc expenses on credit card each month that we pay in full each month - this is for things like clothes, gifts, hair cuts, etc - usually in the range of $300 on avg.

We are still able to save a good bit each month, well over the avg. recommendation of 10% of income.
Hope that helps

 

[drdavemd]

Fringe may be that they offer you additional benefits above and beyond the 45K salary they list. IE: covering your health/disability/life insurance. These are important questions to ask about especially if you are going to be the breadwinner for a family and your insurance costs could easily be over $1000 a month.

Start by looking at what you spend now. You may be a student, but presumably you are getting money from somewhere (loans, Dad, etc.) and spending it on stuff (cars, food, DVDs). Go through and add up your current costs of living and see how you will do on $3000 a month, which is a pretty typical take home salary for a resident.