CA crew: Simi Valley, CA???

[Jays89YJ]

I'm in the middle east right now. I received an email yesterday from a recruiter for a company in the Simi Vally. The company wants me to be their electro-mechanical designer. I'm going to have a phone screening interview later on this evening...

Project duration: 6+ months
Project starts: Whenever I get there.
Hours per wk: 9-80 schedule... Work 9 days out of 14 and it's 80hrs. So every other Friday off.
Overtime pay: Time and a half.
Hourly rate: I asked for $50, but agreed to $48.
Yearly earnings: $48/hr x 2080hrs = $99,840
Obviously I'll be paying taxes.

Working over here, I pay taxes on anything over $80K/yr.

Is the Simi Valley nice? Is it expensive to live there? Is the salary I've been offered enough to live comfortably there? Are houses very expensive there?

I'm 23 years old and not married. I'm doing very well over here, but working 84+hrs/wk. So my hourly rate is in the crapper...

[Robert J. Yates]

you may want to reasses who you sh!t on if you want to have anybody to wheel with when you get here.

[Jays89YJ]

Originally posted by Robert J. Yates
you may want to reasses who you sh!t on if you want to have anybody to wheel with when you get here.

I haven't been sh*tting on anyone.

[Robert J. Yates]

really

[TObject]

Simi Valley is a nice place, IMHO. They've got Reagan's Presidential Library there.

$48/hr is bitching. Expect to pay at least half of it in taxes, unless you are classified as an employee (then your employer will pay pretty much half of your taxes for you).

[Jays89YJ]

Originally posted by TObject
Simi Valley is a nice place, IMHO. They've got Reagan's Presidential Library there.

$48/hr is bitching. Expect to pay at least half of it in taxes, unless you are classified as an employee (then your employer will pay pretty much half of your taxes for you).

Half in taxes!?! Shoot, that's a lot. CA must have some high state taxes.

[cbremer]

i think what sergey was getting at is the fact that if you are an independent contractor, you'll have to pay unemployment/disability,social security, etc.- part of which your employer (if you were an employee and not a contractor) would normally pay. at nearly $100k/year, you'll be in a pretty high federal tax bracket to start off with (38%?). CA's income tax isn't too bad, but the sales tax is higher than a lot of states.

[Jeff Weston]

Jay,

Simi Valley is a nice place to live. It is in Ventura County which has a slightly lower sales tax (7.75% I think which is 0.5% lower than L.A. County). Depending on what you call comfortable, you'll do just fine on the amount you listed, even if you are a contract employee. That said, housing prices are through the roof and I think it takes about a $106,000 annual income to afford the median home price. Anyway, at your age and your circumstances, I wouldn't buy a place anyway. Prices are starting to flatten a bit and it'd be a bit harder to get out of the house if you find yourself moving in the near future. You should have no problem getting a decent apartment for $1000-1500 depending on size.

If you are a contract worker you can reduce your tax burden by itemizing your business expenses on your Schedule C and fully depreciate many expenses entirely in one year if it is your first year as a self-employed filer (*disclaimer* it has been about 10 years since I've been in that situation so please verify).

Good luck.

[blkTJ]

I wish I made 100k a year.

[Jeff Weston]

Originally posted by blkTJ
I wish I made 100k a year.

Keep in mind that a $100K consulting wage is the equivalent to a lower employee wage.

As an employee, your company pays half the FICA (7.65% of your salary?), benefits ($5k-$10K depending on coverage) and pays you for holidays (8 days or more) and vacations (10 days or more), sick time (10 days) 401K matching, bonuses, etc.

So, if you take a $48/hour and work a year with unpaid vacation and holidays, you'd earn $92,928 for 1936 hours worked. Subtracting out the 7.65% FICA you'd be left with $85,819. Out of that, subtract the healthcare costs ( say $5000) and you're left with $80,819. From that, subtract out 401k matching from the company ($30000 and you have $77,819. Oh yeah, subtract out the sick pay ($3840) and you have $73,979.

I'm not an expert on this stuff by any means, but I do know from personal experience that an employee's total compensation package is a lot more than the actual salary earned by the employee. There is definitely an upside to being a contract worker, but many factors must be taken into consideration when evaluating overall compensation. So, go give your employer a hug for paying half your FICA, mailing in your tax payments, providing your insurance, giving paid holidays, vacation and sick time and matching your 401K contributions.

[derf]

Originally posted by Jays89YJ
CA must have some high state taxes.

I don't miss CA state income taxes. TX doesn't have an income tax. But the property tax rate around here is more than double what it is in CA. I'm paying more in property taxes now on my $150K house in TX than I would on the $300K house in CA that I was looking at before moving here. If they don't get you one way, they get you another.


Self employment taxes are a pain to figure out. And with no withholding, you have to be very disciplined with your money or you'll be looking at a big tax bill with no money to pay it. With tax preparation programs available out there, a lot of the work is easier. You just tell the program you're self employed and (hopefully) it asks you the right questions and it fills in the right blanks with the right numbers.

If you're an employee of a contracting agency, they'll do the tax work for you as far as the payroll tax, withholding for everything, etc. so that would be easier for you.


I work a 9/80 schedule right now. Having every other Friday off is great. That is, untill you get screwed out of holiday pay because a holiday lands on an off friday. But as a contractor you probably won't get any holidays so that's a moot point for you.

Remember also to factor in any vacation/holiday time you want to reserve for yourself since it'll probably be unpaid. When evaluating contractor positions, I just estimate 2000 hours (50 weeks working, 2 weeks vacation) to ballpark what I'll be earning.

[Jeff Weston]

Originally posted by derf
I'm paying more in property taxes now on my $150K house in TX than I would on the $300K house in CA that I was looking at before moving here. If they don't get you one way, they get you another.

I knew somebody who paid somewhere in the neighborhood of $9000 in property taxes on a $200K house in the Dallas area. In this area it would be about $2500. That is the one good thing about prop. 13, it helps protect people from being taxed out of their own house as it appreciates ... though it seems like there always new attempts to change this.

Derf is correct, Turbotax or Taxcut will be your friend. One thing to consider is that if you don't pay your quarterly tax estimates as a self employed person, you'll pay some hefty penalties come tax time.

[Paradiddle]

Simi Valley is too hot for humans...

[mrblaine]

Originally posted by Jeff Weston
One thing to consider is that if you don't pay your quarterly tax estimates as a self employed person, you'll pay some hefty penalties come tax time.

Not necessarily. Depends on your accountant.

[TObject]

Originally posted by Paradiddle
Simi Valley is too hot for humans...

That's what they used to say about Anna Kournikova. And then came Enrique Iglesias.

[Paradiddle]

Originally posted by TObject
That's what they used to say about Anna Kournikova. And then came Enrique Iglesias.

he's human?

She'd better be hot because she can't play tennis...

[blkTJ]

Originally posted by Jeff Weston
Keep in mind that a $100K consulting wage is the equivalent to a lower employee wage...

Thanks Jeff, I feel a little better now.

[TObject]

Originally posted by Paradiddle
he's human?

She'd better be hot because she can't play tennis...

I think Enrique Iglesias can be classified as "Self loading carbon based cargo".

What a great couple: a singer that can't sing, and a tennis player that can't play tennis. Both considered by the general public to be hot as hell. Or hot as Simi Valley in our case.

[derf]

Originally posted by Jeff Weston
I knew somebody who paid somewhere in the neighborhood of $9000 in property taxes on a $200K house in the Dallas area. In this area it would be about $2500. That is the one good thing about prop. 13, it helps protect people from being taxed out of their own house as it appreciates ... though it seems like there always new attempts to change this.

It's the price you pay for not having income tax.

I'd rather have one tax taken care of by my mortgage company than have to go through filing state income tax.

I am working on getting a 2 acre property north west of the metro area to build a small house and big shop on. It should cut my tax bill in about half. Let the yuppies pay 5 figure property tax bills instead of me.

[Jays89YJ]

Originally posted by Jeff Weston
Keep in mind that a $100K consulting wage is the equivalent to a lower employee wage.

As an employee, your company pays half the FICA (7.65% of your salary?), benefits ($5k-$10K depending on coverage) and pays you for holidays (8 days or more) and vacations (10 days or more), sick time (10 days) 401K matching, bonuses, etc.

So, if you take a $48/hour and work a year with unpaid vacation and holidays, you'd earn $92,928 for 1936 hours worked. Subtracting out the 7.65% FICA you'd be left with $85,819. Out of that, subtract the healthcare costs ( say $5000) and you're left with $80,819. From that, subtract out 401k matching from the company ($30000 and you have $77,819. Oh yeah, subtract out the sick pay ($3840) and you have $73,979.

I'm not an expert on this stuff by any means, but I do know from personal experience that an employee's total compensation package is a lot more than the actual salary earned by the employee. There is definitely an upside to being a contract worker, but many factors must be taken into consideration when evaluating overall compensation. So, go give your employer a hug for paying half your FICA, mailing in your tax payments, providing your insurance, giving paid holidays, vacation and sick time and matching your 401K contributions.

Meh, buy some horses at a low price, have them appraised at a high price, donate them to a University and write them off in taxes!

Jeff, I am classified as an Independent Contractor now, but fall under some conditions to obtain minimal benefits. I get zero 401K through the company. I have a financial advisor and we've set up a Roth IRA umbrella clause plus other key investments.

I also have a good accountant in NH. He was very good with this overseas business and helped me out quite a bit... I'm buying licenses for my financial advisor in any state I go to for work. Right now I have liquid cash, but in financial accounts getting a much better return than a bank account. I plan on going back to school sometime soon and that is why it's liquid.

Plus there is an Independent Contractor's fund you can invest in. I am unable to do so because of the clause I fall under working overseas... I'm not sure that would be my best investment even when I come back to the US because I've already created a large portfolio.

Derf, in NH I didn't pay state income tax either. Property tax is outrageous and so is the cost of registering a vehicle!!! I was consulting there and it was going great. My accountant helped me out tremendously for taxes. He owns his own business, so knows what it's like I guess. I made too much money to qualify for student loans and had to pay cash.

My g/f owned a few horses and she convinced me to buy one for $1500. I did and that chick had it appraised at $10K!!!! She trained it and took care of it. I had no idea what to do with the thing! LOL. I'd feed him and pet him, but I didn't train him myself. Then she told me to donate it to UNH and receive a tax write off. After a long discussion with her and speaking to my accountant finding out that was legal, I did. Though my accountant was good at writing a lot of things off. It's just not normal for a full time college student consulting in the field. So the government feels. I thought it was normal.

I suppose your right going with 2000 hours instead of the new standard. I'm pretty sure it's 2080 now. Right?

BTW, STAY AWAY FROM WOMEN WHO LOVE HORSES. THEY'RE CRAZY!!!! LOL.

[NAILER341]

i'm not quite sure what it is, but you just rub me the wrong way.

maybe it is all the **** you talk about others non engineered designs, and the blathering boasts for yourself in this post...
agggh well.

[Jays89YJ]

Originally posted by NAILER341
i'm not quite sure what it is, but you just rub me the wrong way.

maybe it is all the **** you talk about others non engineered designs, and the blathering boasts for yourself in this post...
agggh well.

Uhhhhh. Blathering boasts?
I had several projects where I undershot the cost and broke even or lost money. So I fawked up and failed.

BTW, there is no way, I'd rub you the right or wrong way mister.

[Robert J. Yates]

Originally posted by Jays89YJ
I had several projects where I undershot the cost and broke even or lost money. So I fawked up and failed.

I'm not an engineer but I have been working with them for almost my entire varied career. I used to run a general engineering construction firm and I often went to the bank big time on change orders when the engineer fawked up the calculations. First thing I always did when I got a set of plans to bid on was try and find the mistakes and I was never dissapointed.

[Jeff Weston]

Originally posted by Robert J. Yates
First thing I always did when I got a set of plans to bid on was try and find the mistakes and I was never dissapointed.

That is precisely why we do our own construction staking because the surveyor is the last line of defense for any errors (which will always happen due to the very nature of the business). It is unconscionable when a contractor purposefully builds something incorrect so that he can get a change order instead of alerting the client of the problem.

You didn't do things like that, did you Robert?

[Jays89YJ]

Originally posted by Robert J. Yates
I'm not an engineer but I have been working with them for almost my entire varied career. I used to run a general engineering construction firm and I often went to the bank big time on change orders when the engineer fawked up the calculations. First thing I always did when I got a set of plans to bid on was try and find the mistakes and I was never dissapointed.

I tried to do that as well, but I wasn't very good at it to start. One time I was really dumb (first project I had next to no idea how to handle it on my own) and the company put in the contract that I had to come up with a set price for the entire job. I was a dingus and didn't factor in there might be ECO's involved because it looked pretty simple. I thought I had problems with an electrical engineer's calcs on a LOT# of samples of RF cables sent for voltage drop testing. The manufacturer skimped out on some copper to try to save $$$ and all the cables were failing miserably. It was manufactured in China.

Jeff, we have a surveyor from England that says he knows so much about this and that and he's the best. He's definitely experienced, but lacks communication skills. He layed out a bunch of buildings we were to put up for the US Army and they were all the wrong size and the A/C pads were all in the wrong spots. He said he got the drawing from our network. I asked him the number and he told me. There were 3 revisions clearly labeled in the drawing number and he took Rev 1. LOL. Bottom line, he never communicates with our department. He's the survey party chief so he feels he knows best, don't talk to him. He'll always argue with somebody if that person tells him something needs to be surveyed. He is probably the most bitter man I've ever met. I would fire him, but he's one of the "untouchables" in the Texas clique because the DPM worked with him in Kosovo and personally hired him. That DPM is going to be gone in the next 5 days.

[Robert J. Yates]

Originally posted by Jeff Weston
It is unconscionable when a contractor purposefully builds something incorrect so that he can get a change order instead of alerting the client of the problem.

You didn't do things like that, did you Robert?

Oh no, I was much craftier than that. I would factor certain aspects of my bid on a mistake in the plans if it was large enough and then I would start my letter writing campaign to the owner or RE once the contract was in place.

I once bid 50 cents per plant on a River park job so I could get the earthwork in at $25/cyd because the engineer had screwed up the quantities on the cut and fill calcs. I doubled the price of a 1 million dollar contract with just one change order - the owner (County Parks and Recs) was not happy but they paid. It was worth giving away 20k in plant materials on that job so I could structure my bid on the mistake.

This was back in the early 80's and most of the engineers were still using planimeters while I was using a HP computer to calc cut and fill. Technology can be a bitch if ya don't have it

[derf]

Originally posted by Robert J. Yates
This was back in the early 80's and most of the engineers were still using planimeters while I was using a HP computer to calc cut and fill. Technology can be a bitch if ya don't have it

I'm an engineer who works with other engineers. Trust me when I say that computers only let you automate your mistakes and multiply their effects by many times.

[Robert J. Yates]

Manual planimeters are flat out evil. I was using some at the time, cutting edge tech from HP which had adapted a planimter to their computer. Cut my quantity analysis time in half although it took us awhile before we trusted it enough to use for verification of the quantities in the bid docs.

[JeepGal]

hehehehe...planimeters.

Ive got one sitting right here in front of me...I hate that thing...know anyone who could use it?

Back to topic...Simi is nice, but to be honest with you, it might be hard to find a single family home in the 450k range I think. (Based upon the info youve stated, with good credit, and a decent down, thats what your income could support.) Im sure you could find a condo or townhouse though

Tam

[Jays89YJ]

Originally posted by JeepGal
hehehehe...planimeters.

Ive got one sitting right here in front of me...I hate that thing...know anyone who could use it?

Back to topic...Simi is nice, but to be honest with you, it might be hard to find a single family home in the 450k range I think. (Based upon the info youve stated, with good credit, and a decent down, thats what your income could support.) Im sure you could find a condo or townhouse though

Tam

$450K? Woah, 20% down on that is a bit steep. I do have really good credit. I've been planning on putting 20% down on a house, but a $450K house is a bit much.