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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: ChpBstrd on March 11, 2017, 12:07:38 PM

Title: What was your effective tax rate?
Post by: ChpBstrd on March 11, 2017, 12:07:38 PM
Just did taxes. On $132,500k gross pay, we as a couple paid:

$9,050 Federal Income Tax = 6.8%  (1040 line 63)
$8,220 Social Security Tax = 6.2%   (W2 box 4)
$1,923 Medicare Tax = 1.5%           (W2 box 6)
$ 4,134 State Income Tax =3.1%     (location varies by state, "Net Tax")
----------------------------------------
$23,327  or 17.6%

I'm very curious what other Mustachians pay, with different incomes, different sources of income, or from different countries!

We took the standard deduction, maxed our 401(k)s, maxed a dependent care FSA, and earned a couple thousand in taxable interest/dividends.
Title: Re: What was your effective tax rate?
Post by: JLee on March 11, 2017, 12:33:04 PM
$109,500 gross w/rental income. Single/itemized.

~$11,900 federal income tax = 10.86%
~$5,820 social security = 5.3%
~$1360 medicare = 1.2%
~$2,800 state income tax = 2.55%

$21,880 / 19.91%.

$12.5k in rental income was in another state (which ended up showing negative income when filed).
Title: Re: What was your effective tax rate?
Post by: MDM on March 11, 2017, 01:05:47 PM
Quote from: ChpBstrd on March 11, 2017, 12:07:38 PM
Just did taxes. On $132,500k gross pay, we as a couple paid....

If your actual numbers are close to the table below, you might consider using the Roth option in your 401ks (if you have one) for the last few thousand, based on the marginal rate chart:
(http://s16.postimg.org/p6tm6uth1/screenshot_84.png)

CategoryMonthly
Comments
Annual
Salary/Wages for earner #1$5,521$66,250
Salary/Wages for earner #2$5,521$66,250
Daycare FSA$167$2,000
FICA base salary/wages$10,875$130,500
401(k) / 403(b) / TSP / etc.$3,000At maximum$36,000
Income subject to IRS tax$7,875$94,500
Qualified dividends + LTCG$167$2,000
Federal Total Income$8,042$96,500
Federal tax$7572017 rates, MFJ, item. ded., 2 exempt.$9,082
State/City tax$346Guess, using 4.70% * (AGI - Exempt'n)$4,155
Soc. Sec.$674Assumes 2 earners paying$8,091
Medicare$158$1,892
Total income taxes$1,935$23,220
Add Health + Daycare reimb.$167$2,000
Income before other expenses  $6,273$75,280


Filing Status21=S, 2=MFJ, 3=HOH
# Exemptions2
Adult #1Adult #2
Age3030
# of earners2
Total Income$96,500
Std. Deduct.$12,700
Act. Deduct.$19,635
Exemption$8,100
AGI$96,500
MAGI$96,500
Taxable$68,765
1040 Tax$9,082
AMT adder$0
Saver's credit$0
Tax after n-r credit$9,082
NIIT$0
EIC$0
Child Tax Cred.$0
Net Tax$9,082
Monthly$757
Mtg. Int. (approx.)$11,880
State tax$4,1554.70%
Prop tax$3,600
Item. Deduct.$19,635
VersionV8.14

Loans:Orig. Prin.Orig. LengthCurr. Prin.Yrs leftRate
Mortgage$300,00030$300,000304.000%
Title: Re: What was your effective tax rate?
Post by: canisius on March 13, 2017, 09:05:55 PM
 On $55,400 gross pay, married joint, with three kids

$0 Federal Income Tax = 0.0% (1040 line 63)
$102 Social Security Tax = 0.2%   (W2 box 4)
$651 Medicare Tax = 1.2%           (W2 box 6)
$ 17 State Income Tax =0% (location varies by state, "Net Tax")
$5800 Refund = -10.5%
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-$5030  or -9.1%

I teach and then do consulting work during the Summer out of state, but we mainly work in Texas. We put $3000 into our HSA, 10% into a Roth IRA at Vanguard, and the rest into a Roth 403B at work with no fees. Also, I don't pay into Social Security, I'm not eligible, but I do pay 4110 into TRS, Teacher Retirement Service, and TRS Care .7%. Both are untaxed, but I don't count the former as I'm vested.
Title: Re: What was your effective tax rate?
Post by: Roland of Gilead on March 14, 2017, 12:35:54 AM
Married filing jointly.

I played around with investments to generate about $5000 in dividends, $6,000 in LTCG and $4,500 in STCG which brought us up to $15,500.   To get our income above poverty level, I did a IRA to Roth conversion for $7,000.

We thus had a gross income of $22,500.

$0 federal tax
$0 state tax
$0 FICA
$0 Medicare
We received $5664 tax credit for ACA insurance (silver plan with cost sharing, $250 deductible)

So I guess our effective tax rate is negative 25.2%
Title: Re: What was your effective tax rate?
Post by: MoonLiteNite on March 14, 2017, 05:34:03 AM
If you only look at payroll deductions, i am at around 16%.
Factor in capital gains, from swing trading + ESPP, and side work which i report, i am closer to 28%.
Throw in some land taxes and we are up to 33%
And throw in sales tax, and pushing 40%

Crap :(

edit:
That counts maxed out IRA and 401k and HSA. No other real deductions to use. Single and i have rental income in a high property tax state.



Title: Re: What was your effective tax rate?
Post by: Well Respected Man on March 14, 2017, 06:13:06 AM
Last 5 years of federal: 20.35 21.92 21.31 18.80 17.89. Paid AMT all 5 years, but thanks to maxing out deferred income and HSA for two 50+ people, we may squeak by without AMT this year. For state, about 4.9% last year, so total 22.8%.