**********fixed math from earlier
Suggest starting with a chart like on this page.
2011 Income Tax Bracket - Marginal Tax Rate
Then you can work up approximate taxes for both income levels (pre/post) as follows.
Let's assume you make $186,000 gross and are married filing jointly...the math looks like this:
10% x 17,000 = $1,700
15% x (69,000 - 17,000) = 15% x 52,000 = $7,800
25% x (139,350 - 69,000) = 25% x 70,350 = $17,588
28% x (186,000-139,350) = 28% x 46,650 = $13,062
Total taxes = $40,150
In this case, your MARGINAL tax rate (the amount you pay on each additional dollar you earn) is 28%. But your AVERAGE tax rate = $40,150/186,000 = 21.6%
Now assume you rehire (I plan to take a much lower paying part-time job) and make only $40k/year.
10% x 17,000 = $1,700
15% x (40,000 - 17,000) = 15% x 23,000 = $3,450
Total taxes = $5,150
In this case, your MARGINAL rate is 15%, and your average rate is 12.9%
Your tax savings (I hate to call it savings...maybe call it "reduction" instead) is $40,150 - $5,150, or $35,000. So you'd remove $35,000 from your "income needs" due to lower taxation.
For us the above number is nearly $60,000 instead of $35,000....it will feel so good to get the government out of my pocketbook so heavily.
*Note the above is not perfectly accurate, as it fails to discuss AGI (Adjusted Gross Income), which is what you're really taxed on...but it's an estimate you can use. To get a little closer, simply subtract any pre-tax items (i.e. 401k pre-tax contributions) and the standard deduction from both estimates.