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?