How much do you REALLY pay in federal income taxes every year?

[Thorgrim]

I found a rough calculator that's not really designed for this, but it's from the IRS website and eventually gives an estimate on how much federal taxes you will owe (after a minute or two of filling out a form)

2008 Withholding Calculator

From past tax courses, I've noticed all the middle class and regular exceptions/deductions/credits/etc...etc

I've come to believe that the whole "I work the first 3-4 months of the year just to pay in federal income tax...bring on the federal flat tax!" seems to be BS

Even if you assume a single person, living alone, no dependants (which cuts out the majority of benefits) you still get a healthy amount of deductions...and the average OT'er that would make that sort of claim would make what...$80,000 a year? (well above average)

Even then, I did not see where someone is paying some $27k in Federal Income Tax when making $80,000 a year

Is this a total myth or is there some validity?

About a fifth of the country pays no state income tax, and in those parts you can find yourself paying 0% local tax...many of the others you and your small town are paying around 1% so you can set up a few stop lights...still, 0%-1% still comes nowhere near making up the numbers...and even if they did, that's not to uncle sam or the federal government...it's to your local neighbors

80,000 would be about 5k in social security and medicare/etc...if you want to include that as taxes to the "federal government" okay...so now, excluding local/state/SS/medicare/etc taxes...at 80,000 do YOU have to pay more than $22k in federal taxes?

[kinggovernor]

federal income tax is one of the many taxes that we pay

[WickedLou9]

I just went back to look at my old returns. In 2006 total combined income ( me + wife ) was about 94k.
after all of our deductions and stuff, our taxable income was only 66k. We ended up owing about $9500 in federal income tax. So really that's about 10% after all is said and done. If you add on state taxes, sales taxes, property taxes, etc... I imagine it's alot higher in terms of a sum total but just federal, yeah it's not bad.

[JaJae]

Originally Posted by Thorgrim

Even then, I did not see where someone is paying some $27k in Federal Income Tax when making $80,000 a year

Is this a total myth or is there some validity?

I wouldn't be surprised if the number is exaggerated, but as others have said in the thread there are other forms of taxation than just federal taxes that a flat tax would eliminate (Gas taxes, cigarette taxes, "sin taxes", property taxes, state taxes, sales tax, phone tax, etc). Hell I got two new tires put on my car last week and I was charged a "tire tax."

[Thorgrim]

Originally Posted by WickedLou9

I just went back to look at my old returns. In 2006 total combined income ( me + wife ) was about 94k.
after all of our deductions and stuff, our taxable income was only 66k. We ended up owing about $9500 in federal income tax. So really that's about 10% after all is said and done. If you add on state taxes, sales taxes, property taxes, etc... I imagine it's alot higher in terms of a sum total but just federal, yeah it's not bad.

yes but none of that is going to the federal government...property taxes go towards your local schools and other "your neighborhood" stuff...local taxes same thing...state taxes it's a matter of where you live (again a fifth of the country in many prosperous states like Florida have no state income tax)

Sales tax again is a matter of state (some states don't even have it)

So again, going back, the first six weeks of your year you paying for all the benefits of the federal government offers your country and yourself, the other 10 and half months, you are paying no federal income tax

Sounds like a pretty good deal to me

Six Weeks >>>> Four Months

[JaJae]

Originally Posted by Thorgrim

yes but none of that is going to the federal government...property taxes go towards your local schools and other "your neighborhood" stuff...local taxes same thing...state taxes it's a matter of where you live (again a fifth of the country in many prosperous states like Florida have no state income tax)

Sales tax again is a matter of state (some states don't even have it)

So again, going back, the first six weeks of your year you paying for all the benefits of the federal government offers your country and yourself, the other 10 and half months, you are paying no federal income tax

Sounds like a pretty good deal to me

Six Weeks >>>> Four Months

The idea that you work 3-4 months to pay the government includes federal, state and local taxes. And the argument isn't always used to promote a flat tax, it's used to promote lowering of taxes across the board, not just federal income tax.

[thewise1]

Why would federal income taxes be the only thing listed in this? Add FICA in there as well and it almost doubles.

[Thorgrim]

Originally Posted by thewise1

Why would federal income taxes be the only thing listed in this? Add FICA in there as well and it almost doubles.

FICA doesn't fund pork spending
FICA doesn't fund congressional salaries
FICA doesn't fund katrina relief
FICA doesn't fund the stimulus
etc
etc
etc

It's a program where you DIRECTLY get money back...I know many people who have seen what NASDAQ has done and do not want to throw a ton of money into the stock market, it's a gamble, their retirement plans are more focused on safe bonds and so forth...

bottom line, to really calculate how much you are POTENTIALLY losing in FICA, you'd have to calculate all the SS checks you'd get from your 60s to your 90s (i certainly plan on living into my 90s)...put all that together, and look at the difference between that and a retirement plan of something a little stable, like bonds, and then see that as the tax...it'd be far less than 6%...which is still not "double" 10%

[kombayn]

To answer the topic question... TOO MUCH! I should be able to take that federal income tax money and use it as I please. But no... That's not progressive.

[Thorgrim]

Originally Posted by kombayn

To answer the topic question... TOO MUCH! I should be able to take that federal income tax money and use it as I please. But no... That's not progressive.

If you are for abolishing the federal government completely and having a confederation of states...that is the one thing that all the constitutional founding fathers disagreed on...if you want to stake out such a radical position you can go do so in another thread that wouldn't be that off-topic

if you want to participate, you do as lou did and actually state how much you paid in federal income tax

[kombayn]

I didn't say get rid of the Federal Government. I said, get rid of the federal income tax. Geez... What is with everyone trying to spin what someone posted into something else. As a matter of fact I paid $2,300 That's still too much, I can think of 2,300 different ways to spend that money which would help the economy... But no, lets just give Trillions of dollars to a wasteful spending government... BECAUSE THAT'S THE PROGRESSIVE WAY!

[WickedLou9]

Originally Posted by kombayn

I didn't say get rid of the Federal Government. I said, get rid of the federal income tax. Geez... What is with everyone trying to spin what someone posted into something else. As a matter of fact I paid $2,300 That's still too much, I can think of 2,300 different ways to spend that money which would help the economy... But no, lets just give Trillions of dollars to a wasteful spending government... BECAUSE THAT'S THE PROGRESSIVE WAY!

Without the income tax what is there? WIthout that we get rid of immigration, border patrol, the entire military, the FBI, the CIA, etc. We would have a figurehead of a government with no authority. We would eventually get taken over by CHina or Russia.

[kombayn]

Please show me the documentation where that is true. Please, I want to see it. The Government can get their money through tariffs or other taxes (such as our Federal Gax Tax which earns 18.3 cents per gallon). There are tons of Federal Taxes that don't include income tax. If you believe that giving your money to the Government before you even see it after working hard labor, be my guest. But it's wrong and it's really stupid. I trust the people more with their money than the Government with people's money. I trust that our Government in their mind think they're doing what's best for the people but with the last 8 years of our President's Administration and our flawed Congress, they don't have a full grasp of what to do properly. I trust you more Lou to know what to do with your money than them. Is that really a flawed way of thinking in our country?

[6SpeedTA95]

Originally Posted by Thorgrim

I found a rough calculator that's not really designed for this, but it's from the IRS website and eventually gives an estimate on how much federal taxes you will owe (after a minute or two of filling out a form)

2008 Withholding Calculator

From past tax courses, I've noticed all the middle class and regular exceptions/deductions/credits/etc...etc

I've come to believe that the whole "I work the first 3-4 months of the year just to pay in federal income tax...bring on the federal flat tax!" seems to be BS

Even if you assume a single person, living alone, no dependants (which cuts out the majority of benefits) you still get a healthy amount of deductions...and the average OT'er that would make that sort of claim would make what...$80,000 a year? (well above average)

Even then, I did not see where someone is paying some $27k in Federal Income Tax when making $80,000 a year

Is this a total myth or is there some validity?

About a fifth of the country pays no state income tax, and in those parts you can find yourself paying 0% local tax...many of the others you and your small town are paying around 1% so you can set up a few stop lights...still, 0%-1% still comes nowhere near making up the numbers...and even if they did, that's not to uncle sam or the federal government...it's to your local neighbors

80,000 would be about 5k in social security and medicare/etc...if you want to include that as taxes to the "federal government" okay...so now, excluding local/state/SS/medicare/etc taxes...at 80,000 do YOU have to pay more than $22k in federal taxes?

The working 3, 4 or 5 months a year to pay you taxes is NOT the federal income tax its ALL of your taxes combined.

[6SpeedTA95]

Originally Posted by Thorgrim

FICA doesn't fund pork spending
FICA doesn't fund congressional salaries
FICA doesn't fund katrina relief
FICA doesn't fund the stimulus
etc
etc
etc

Ummmm yes it does, why do you think all these so called "trust funds" are out of money? Because the congress has been using it almost since inception to fund shortfalls in the regular budget.

[kombayn]

At least not everyone thinks a bunch of old-ass farts know what's right for our country. Social Security is a fraud, senior-citizens should have been a uproar after they found out that the Government was going to take from that system they paid in to pay for Government budget mismanagement... But no, we have people around our country who think this is perfectly fine.

[6SpeedTA95]

We paid 19,8xx in taxes last year, but that was just payroll taxes.

Add on property tax another 1400 bucks and we're at 21,2xx then tack on sales tax and gas tax and we'd be up closer to 27k maybe 28k....which is about 35% of our income which means basically everthing we earn till the end of april goes to pay taxes.

edit: thats with both of us putting in a lot in our 401k decreasing our taxable income and our health insurance is fairly expensive as well, which also decreases the taxable income. So if our insurance was cheaper or we weren't contributing to our 401k's we would have paid a lot more.

[WickedLou9]

Originally Posted by 6SpeedTA95

We paid 19,8xx in taxes last year, but that was just payroll taxes.

Add on property tax another 1400 bucks and we're at 21,2xx then tack on sales tax and gas tax and we'd be up closer to 27k maybe 28k....which is about 35% of our income which means basically everthing we earn till the end of april goes to pay taxes.

I wish our property taxes were that low. NJ has the worst damn property taxes in the country. We have have .15 acres I think. It's a small lot anyway. The town is a thouroughly average working class town, our house is small by most standards and yet we pay more than 5k a year in property taxes. It's completely insane. And that's actually low for NJ. There are people paying upwards of 10k a year all around the state, especialy in the north.

[6SpeedTA95]

Originally Posted by WickedLou9

I wish our property taxes were that low. NJ has the worst damn property taxes in the country. We have have .15 acres I think. It's a small lot anyway. The town is a thouroughly average working class town, our house is small by most standards and yet we pay more than 5k a year in property taxes. It's completely insane. And that's actually low for NJ. There are people paying upwards of 10k a year all around the state, especialy in the north.

Property is cheaper here though too. Keep in mind 160 to 190k gets you a nice house here. Property taxes are about 1.35% a year.

[Thorgrim]

Originally Posted by kombayn