Author Topic: What is your TOTAL tax burden?  (Read 2100 times)

DadJokes

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What is your TOTAL tax burden?
« on: March 08, 2019, 08:38:26 AM »
Since federal income tax is just a small portion of the overall taxes we pay, I thought I would look into all state, local, and federal taxes. I will be using 2019 estimates in this calculation.

1) Federal Income Tax - After adjustments, standard deduction, and credits our total tax bill for 2019 will be approximately 1.36% of income, $1,231.

2) Social Security & Medicare - 7.65% of eligible income comes out to 7.15% of total income, $6,452.

3) Property tax - Combined tax rate for my town & county is $3.5164 for every $100 of assessed value. An appraisal of $256k gives an assessment of $64,100, resulting in tax of $2,254.

4) Sales tax - This is the hardest to calculate, but it looks like we will spend around $16,600 on items subject to sales tax in 2019. With a local sales tax of 9.25%, $1,405 of that total will be sales tax.

5) Vehicle Registration - Two vehicles come out to around $192.

6) Gas tax - TN gas tax is $0.214 per gallon. I am estimating that we will use 1,545 gallons of gas at an average price of $2.20/gallon, giving around 702 gallons of fuel and $150 in taxes.

All told, we will pay approximately $11,684 in taxes, which comes out to around 12.9% of all income (taxable and otherwise).

How does that compare to your total tax burden?

v8rx7guy

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Re: What is your TOTAL tax burden?
« Reply #1 on: March 08, 2019, 09:00:24 AM »
1) Federal Income Tax - $1,849

2) Social Security & Medicare - $5,251

3) Property tax - $2,694

4) Sales tax - No Idea.  If we spent $15,000 on taxable items, that would be $1,305, we will go with that.

5) Vehicle Registration - $230 (two vehicles, pop-up travel trailer, tow dolly)

6) Gas tax - WA gas tax is $0.494 per gallon, we used about 1,000 gallons last year based on $250/mo from our budget and estimating $3.00/gal.  So $491.

Grand Total: $11,820 which comes out to approximately 16.5%
« Last Edit: March 08, 2019, 02:11:23 PM by v8rx7guy »

NotJen

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Re: What is your TOTAL tax burden?
« Reply #2 on: March 08, 2019, 09:41:13 AM »
Total estimated tax burden for my 2018 actuals: $29,770

1) Federal Income Tax = $14,561 (11.7%)

2) FICA = $8,865 (7.1%)

3) Property Tax = $910 (0.7%)

4) Sales Tax - Estimate, based on 9% of $17.4k spending that was mostly all taxable stuff = $1,566 (1.3%)

5) Vehicle Registration - Ad valorem tax + tag fee = $106 (0.1%)

6) Gas Tax - Estimate, Wikipedia says 20.4 cents of state tax, and 18.4 cents of federal tax, on ~400 gal = $157 (0.1%)

7) State Income Tax - we have state income tax here = $3,605 (2.9%)

% of all sources of income = 23.9%. 


I'm used to looking at the large percentage of fed+fica+state income tax, but interesting to know that the other taxes are only 2.2% of income.  They are 9.6% of my 2018 spending, though.
« Last Edit: March 08, 2019, 09:46:56 AM by NotJen »

Bloop Bloop

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Re: What is your TOTAL tax burden?
« Reply #3 on: March 09, 2019, 01:37:05 AM »
I'm Australian by the way.

1) Income tax approx $45,000

2) Medicare levy $3,000

3) Sales tax (GST) on business takings $22,500

4) Sales tax on private consumption (GST) $3,000

5) Land tax $3,000 (investment property)

6) Rates $1,250 (family home)

7) Vehicle registration $900

8) Fuel excise $250

Grand Total: approx $79,000 in tax paid

In other words for every $1 earn, I pay about 35 cents in tax, 20 cents in business expenses, and I take home 45 cents in my pocket

So you can kinda see why living in Australia is very expensive



Much Fishing to Do

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Re: What is your TOTAL tax burden?
« Reply #4 on: March 28, 2019, 02:52:56 PM »
Crazy outlier year, few extremely profitable business projects, so this is interesting to me because numbers all many times higher than i am used to.  In my job I generally made around 130k.  Then started business and made less (like $80k), then more (got it back to six figures for a few years), then much more the last couple years (300k, 400k) and then this year ($1.5M).  The amount of hours/work/pressure/liability did also increase many times as well, so at end of year wound down business and am consulting now.  I'm not promising the below is right as bouncing between business return and personal

Total Income:  $1,550,000
Federal: 472k
State & Local: 51k
FICA: 20k
Property: 4k
Sales Tax: 3k?

Total: 550k of $1,550,000 (35%)

So Basically made 15x annual spending, spent 1x (we admittedly splurged as I was drowning in work), paid taxes of 5x and so saved 9x.  Pretty instant & unexpected fatFIRE.

« Last Edit: March 28, 2019, 02:54:30 PM by Much Fishing to Do »

TexasRunner

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Re: What is your TOTAL tax burden?
« Reply #5 on: March 28, 2019, 02:57:56 PM »
Posting to follow:

I don't actually know just yet but fr calendar year 2019 I am splitting out ALL sales tax and other local taxes in mint.  I should be able to state exactly what I paid in taxes to local, state and federal, by the end of the year without having to guess at Sales Tax.  It will be an interesting experiment.

Also good to note:  Federal gas tax is 18.4 cents per gallon, State (Texas) is 20 cents per gallon.  Since the prices fluctuate constantly, you actually cant get fuel taxes paid without breaking out every single transaction...  Which I am.  So there's that.

See you guys in January.

secondcor521

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Re: What is your TOTAL tax burden?
« Reply #6 on: March 28, 2019, 06:33:40 PM »
6) Gas tax - TN gas tax is $0.214 per gallon. I am estimating that we will use 1,545 gallons of gas at an average price of $2.20/gallon, giving around 702 gallons of fuel and $150 in taxes.

I'm not sure, but I think there is a federal gas tax as well.

Also, in your first paragraph you allude to state income taxes but you labeled item 1 as federal income taxes.

I really can't play this game.  As a retired person with various small income streams and side gigs plus draws on retirement I don't really have a solid definition of income.  Also, I pay ridiculously low taxes because I look like a low-income unemployed person.

DadJokes

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Re: What is your TOTAL tax burden?
« Reply #7 on: March 29, 2019, 07:11:17 AM »
6) Gas tax - TN gas tax is $0.214 per gallon. I am estimating that we will use 1,545 gallons of gas at an average price of $2.20/gallon, giving around 702 gallons of fuel and $150 in taxes.

I'm not sure, but I think there is a federal gas tax as well.

Also, in your first paragraph you allude to state income taxes but you labeled item 1 as federal income taxes.

I really can't play this game.  As a retired person with various small income streams and side gigs plus draws on retirement I don't really have a solid definition of income.  Also, I pay ridiculously low taxes because I look like a low-income unemployed person.

You're right - I was pretty lazy in calculating that. I even used the old tax, rather than the new one passed in 2018. I also worded that line completely wrong, though ~700 gallons is still close to what we expect to drive, so that should be 0.26 state tax per gallon & 0.184 federal tax per gallon, totaling ~$312. Thanks for pointing that out for me!

I just wanted to break out all taxes, including federal. My state doesn't tax income.
« Last Edit: March 29, 2019, 08:45:25 AM by DadJokes »

bacchi

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Re: What is your TOTAL tax burden?
« Reply #8 on: March 29, 2019, 01:05:22 PM »
Good exercise.

1) Federal 4.35%
2) SS 7.65%
3) Property 2.19%
4) Sales 1.1%
5) Vehicle .09%
6) Gas .06%

= 15.44% of income went to taxes

Not too bad.


JSMustachian

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Re: What is your TOTAL tax burden?
« Reply #9 on: April 24, 2019, 03:36:34 PM »
My calculations from Texas:

Federal- $502.63
SSN and Medicare- $5773.10
Property Tax- $3420
Sales tax- $148.24
Vehicle Registration- $148 (2 vehicles)
Gas Tax- $99.84

$10091.81 in total tax which is 6.94% of our income.
« Last Edit: April 24, 2019, 03:40:20 PM by JSMustachian »

Bloop Bloop

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Re: What is your TOTAL tax burden?
« Reply #10 on: April 25, 2019, 05:07:06 PM »
My calculations from Texas:

Federal- $502.63
SSN and Medicare- $5773.10
Property Tax- $3420
Sales tax- $148.24
Vehicle Registration- $148 (2 vehicles)
Gas Tax- $99.84

$10091.81 in total tax which is 6.94% of our income.

How do you have so much untaxed income?

Crazy how much taxes differ in this thread. I feel like literally the large majority of every dollar I earn goes to tax.

The_Dude

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Re: What is your TOTAL tax burden?
« Reply #11 on: April 25, 2019, 05:35:26 PM »
I paid 30% of my gross income in all the major forms of taxes (fed, state fica, medicare, sales tax etc.).   

I paid about twice as much in taxes as I did for all other expenses.

JSMustachian

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Re: What is your TOTAL tax burden?
« Reply #12 on: April 26, 2019, 12:30:21 PM »
My calculations from Texas:

Federal- $502.63
SSN and Medicare- $5773.10
Property Tax- $3420
Sales tax- $148.24
Vehicle Registration- $148 (2 vehicles)
Gas Tax- $99.84

$10091.81 in total tax which is 6.94% of our income.

How do you have so much untaxed income?

Crazy how much taxes differ in this thread. I feel like literally the large majority of every dollar I earn goes to tax.

Hello Bloop Bloop,

I suspect it's my wife's job as a teacher. She has access to a pension and a 403B/457B so that hides a lot of money from income taxes. Plus the child tax deduction helps too.

Laserjet3051

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Re: What is your TOTAL tax burden?
« Reply #13 on: April 26, 2019, 02:44:35 PM »
Is everyone posting here using the same definition for the denominator? For example, OP is defining the denominator as total income.  If your strictly a wage slave, then perhaps thats simple, every $ you earned prior to any payroll deduction, correct?

If your a business owner who does or does not, also work as a W2, do you include total gross business income in the denominator? Prior to removing any and all business expenses? If we all agree this is the standard definition for this thread, is that a fair representation of tax liability? Since only business profits are taxed, shouldnt we strip out biz expenses to perform this calculation? And if we do that, wont the %s posted above (for business owners) rise substantially, making the estimated %s above artificially deflated?

The same argument could be made for W2 folks; that the % tax liability should be a function of AGI, after deductions, as it portrays a more accurate reflection of tax load. What do you think?

DadJokes

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Re: What is your TOTAL tax burden?
« Reply #14 on: April 26, 2019, 04:02:00 PM »
I would think that income before taxes is the appropriate way to include business income in this, since that is what you are taxed on.

Along with our W2 income, I also included bank interest and VA disability.

The_Dude

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Re: What is your TOTAL tax burden?
« Reply #15 on: April 30, 2019, 07:00:38 PM »
I used total income, rather than AGI.  As the after tax stash grows it adds a nice little chunk to my gross income.  Thankfully almost all qualified dividends.

As a business owner I'd use the net profit from the business that flows to you as your income and that is subject to taxes, not the income at the business level.  That wouldn't make any sense. 

I also, don't think W2 folks should use AGI.

STEMorbust

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Re: What is your TOTAL tax burden?
« Reply #16 on: April 30, 2019, 10:42:57 PM »
I'm in Oregon and have paid 31% of my YTD earnings to income tax (about $15k). Feeling like I could be doing a lot better after seeing the other replies.


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cashstore

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Re: What is your TOTAL tax burden?
« Reply #17 on: May 26, 2019, 06:24:40 AM »
0.85% of 'salary' get's taxed federally.  Officially we are in the 22% tax bracket.
We pay about 2% of 'salary' to the state.  Officially it is 4.25% less some adjustments.
Starting this year the City is taking a full 1%.  I called and they said it's coming off of AGI.  As such, I'd expect it to be effectively less than 0.50%.
Property taxes: About $5k on a $200k house, give or take.  This is by far the largest in absolute or percentage terms.
My FICA is the same as everyone else.
I probably drive less, so less gas tax.
All in all I probably lose about 5%-6% effective to taxes, overall, plus FICA.
Planning to move to Florida in 4 years when I fully FIRE to avoid the 1% city and 4.25% state, and that property tax.  The way I see it with 2 kids I'm getting about $60k federally tax free, and around $80k if we have kid 3 like we plan.


APowers

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Re: What is your TOTAL tax burden?
« Reply #18 on: May 26, 2019, 07:20:35 AM »
Earned income: ~$40k

Taxes: ~0


Federal/state income tax (including medicare/ss): -2700
Property tax: ~1300
sales tax: ~800?
gas tax: ~200
vehicle registration: ~200

As a percentage of income: 0%.  I'm actually surprised at how HIGH all y'all percentages are; you must be in a much higher income bracket than me.