Your 2016 net income tax rate

[moof]

For 2016 I am paying 15.3k to federal, and 8.3k to state on 154k gross (another 6k in 401k matching).

Nets out to 14.7% in income taxes.  For as much as people whine about high taxes in the USA, I find my taxes are consistently lower than I think they should be given the state of our roads and schools.

[KMMK]

I feel similar about Canada, with our mostly-free health care.
I made $25,000 of taxable money last year, and have a 7% tax rate. In retirement, I expect to pay virtually no tax.

[SimpleCycle]

Looks like 15.4% effective tax rate for federal, and 3.6% state, for a total effective rate of 19%.

[wbranch]

When discussing tax rates in the US it would be best to pick which lines of the 1040 to use and which number to use for gross wages.

I don't have 2016 tax return done yet, but looking at 2015 taking line 56 total tax vs. AGI on line 37 I end up at around 10.4% for federal, total state tax is 4.5%. If I use gross wages before 401k, ira, hsa, employer match, health insurance, etc it ends up being more like 13% combined fed and state income tax. I agree, not too bad. Add in our share of SS and Medicare and all of a sudden in jumps to >21%. And over 28% with the employer share of FICA. Still not too many complaints from me.

[solon]

Using this same methodology (Total Tax / AGI), I paid .8% Federal, and 1.5% State.

Seriously in love with those numbers!

[RangerOne]

My wife didn't work last year so I only paid a glorious 9% effective tax rate according to turbo tax. I was able to stay out of the 25% bracket altogether with my wife's deduction. Our Gross income dropped from around $145k to a little over $120k including some tax lite maternity and disability pay to my wife.

Though correct me if I am wrong. The effective tax rate summarized for the Fed is just your effective income tax right? I don't think it includes the additional (6.2% SS+ 1.45% Med )or so you pay in payroll tax. Though I suppose the 6.2% goes away after $127k earnings though being right on the border almost all my income pays that out. California also siphons off a small 0.9% payroll tax on earnings up to 200k.

[stoaX]

15.5% federal, 5.0% state.  No city income tax where I live. 

However, in addition to the aforementioned social security and Medicare payroll taxes, it would be interesting to add in sales tax (8% where I live), auto registration fees, the premium taxes and ACA fees built into your health insurance premiums, annual property taxes ($8k is a typical amount in my neighborhood), taxes in your internet, phone, cable, electic, gas and water bills. 

That's all I can think of right now, I'm sure there's more.

[Saskatchewstachian]

Wow I am jealous of some of those numbers. I paid $23717 of tax for a tax rate of 24.6%.......

I will get $2000 back though as part of a graduate retention program in my province! Which should mean a nice refund, although it still sucks to pay 25% of your income in tax. Of course thats before CPP and EI premiums as well.

Top tax bracket reached was 20.5% Federal and 13% Provincial. Although I just barely hit that bracket in the federal level so it didn't affect me much.

[stoaX]

15.5% federal, 5.0% state.  No city income tax where I live. 

However, in addition to the aforementioned social security and Medicare payroll taxes, it would be interesting to add in sales tax (8% where I live), auto registration fees, the premium taxes and ACA fees built into your health insurance premiums, annual property taxes ($8k is a typical amount in my neighborhood), taxes in your internet, phone, cable, electic, gas and water bills. 

That's all I can think of right now, I'm sure there's more.

Also 39.6 cents per gallon on gasoline in California.

[Philociraptor]

Between W-2 income (adding in 401(k) contributions and matching) and "cost sharing" from roommates, my wife and I made $147,918. We paid $10,969 (7.42%) in FICA taxes, $9,314 (6.3%) in Federal, and $3,101 (2.1%) in property for a total of 15.81% in taxes. This isn't counting small taxes like vehicle registrations, sales taxes, etc.

Edit: Line 57 ($89,087) / Line 37 = 10.45% Federal.

[HPstache]

Using line 56 divided by line 37, I come up with 2.5% federal.... no state income tax in WA. 

[kpd905]

Ours ended up at 13.3% due to not maxing out retirement accounts.  Had to save up for a down payment.  Should be able to get that lower for 2017.

[Jesstache]

Income $198k about 90% W2, 10% Self-employed
Fed, SS, Med: $38,274 (19.3%). I don't have the exact break down yet.
OR State: $12,968 (6.5%)

We maxed all tax advantaged space, including employer match for self employment i401k but there's no sales tax in OR... meh.  Our property taxes are $5k on our primary residence, $2k and $1.6k on two rental properties so....  factor that in and we're pushing $60k. 

Next year we'll have a similar total income but from a single W2... so less SSI & Medicare but also less than half tax deferred 401k space.  :/

[WerKater]

In Germany:

Gross income	63200 €
Health insurance contributions (*)	4800 €	7.6 %
Unemployment insurance contributions (*)	900 €	1.5%
Pension insurance contributions (*)	5800 €	9.2%
Additional social insurance contributions by employer (**)	~11000 €	~17%
Federal income tax	14300 €	22.6%

(*) These are not quite taxes (according to the how government names stuff) but obligatory. Of course, I do profit from the insurances. At least from the health insurance. I could do without the stupid pension. Anyway, it is hard to compare to a straight tax.

(**) Formally, I do not pay these, but my employer. But I earn the money that pays for them, so basically it's a tax on my labor as well.
Properly calculated, the total tax rate including social insurances is (4800+900+5800+11000+14300)/(63200+11000) = 49.6%

KMMK, I think I want to live in Canada...

[Guide2003]

Total Tax / AGI for me was 4.1% this year. If I added non-taxable income to the AGI it drops it to 2.9%. No state taxes! I think property taxes on our house were around $400.

[MoonLiteNite]

around 20% + 10% for land tax
Took full IRA and HSA deductions, only around 10k for 401k.
No other real deductions to claim.

I having profits from ESPP, around 50% of my base pay as profit. which threw me through the roof in taxes. I ended up getting a "refund" of 2k, to owing 8k once i put in my ESPP info in.

[kayvent]

In Germany:

Gross income	63200 €
Health insurance contributions (*)	4800 €	7.6 %
Unemployment insurance contributions (*)	900 €	1.5%
Pension insurance contributions (*)	5800 €	9.2%
Additional social insurance contributions by employer (**)	~11000 €	~17%
Federal income tax	14300 €	22.6%

(*) These are not quite taxes (according to the how government names stuff) but obligatory. Of course, I do profit from the insurances. At least from the health insurance. I could do without the stupid pension. Anyway, it is hard to compare to a straight tax.

(**) Formally, I do not pay these, but my employer. But I earn the money that pays for them, so basically it's a tax on my labor as well.
Properly calculated, the total tax rate including social insurances is (4800+900+5800+11000+14300)/(63200+11000) = 49.6%

KMMK, I think I want to live in Canada...

As a slight aside, we used to have tax rates like that until the greedy bourgeoisie middle class started to get better off with a low unemployment rate and rising incomes in the '90s and '00s. You can guess what type of politician and policies they voted in: cut social programs and cut taxes.

[Fireball]

Finally did our taxes.  12.24% federal tax rate according to Turbotax. No state income tax since in TN.   Our lowest since 2012 even though our income has probably grown 15% since then.   

[Proud Foot]

I haven't completed mine as I am still waiting on a K-1.  I usually do the total tax (line 63) / AGI(line 37) to calculate my net rate, but for my 2015 return I had some refundable credits so I used the overpaid (line 75) and added back in my payments (line 64, line 65, line 70). 

[tarheeldan]

I paid 14.38% - that's including everything - Medicare, SS, Federal Taxes (no state taxes here in NH for me as I have no property, taxable dividends were under threshold, and we have no sales tax). A very light burden in my view.

[NorthernBlitz]

15.1% including Federal, NY State, and SS + Medicare

[Mariposa]

(FICA + federal + local taxes) / gross W2 wages = 18% for 2016

Using the same methodology, we paid 28.6% of our gross wages in taxes in 2015. That was before MMM, and we foolishly contributed only $8k into our 401k/403b. 2016 was also the first full year of the mortgage interest deduction for us.

[2Birds1Stone]

20.3% Fed
  7.6% State
  4.2% SS
  1.6% Medicare

33.7% effective tax rate. FML lol

[Errol Flynn]

0% Fed
1% State
7.2% FICA

I wasn't working for the first few months of 2016, so this was pretty easy to manage, but I'm shooting for a 0% federal tax rate again in 2017.

[2Birds1Stone]

Jeez, how is everyone paying such low taxes?

So far mine seem the highest in this thread.

[tarheeldan]

Jeez, how is everyone paying such low taxes?

So far mine seem the highest in this thread.

Ceteris paribus, I wouldn't mind making more money and paying a higher average tax rate :-)

My salary was $75k last year, of which 18k went into 401(k), 5.5k went into Traditional IRA, and 0.5k went into an FSA. That's 32% of salary sheltered from taxes.

[bacchi]

29.0%, all in.

That includes federal, deductible sales tax, property tax, and only "my" share of FICA. If I include the other 1/2 of FICA (it's SE income), it's about 36%.

[kayvent]

Jeez, how is everyone paying such low taxes?

So far mine seem the highest in this thread.

Everyone is paying such low taxes because greedy people in USA & Canada during the 80's and 90's wanted lower taxes. Their incomes were rising and they wanted to keep more. Now we have an endless parade of boutique credits and deductions and ways to save taxes.

We'll use me as an example. My salary is about 60K. Being a human being in Canada, I don't pay income tax on the first 12K of income. Being a single parent, the next 12K isn't taxed. With other deductions like childcare and RRSP contributions, the next 13K is untaxed. Of the remaining 23K, I pay the bottom tax rate (the same income tax rate as a single person making 35K).  My tax rate being SOOO high, the Canadian government decides to give me 4748.12$ a year in cash benefits. Which, and you see where this is going, makes my effective tax rate close to someone making around 16K. This isn't a joke but the tax system is.

This is why I hate the Canadian tax system. I pay less in taxes than a single 18-year old kid that got kicked out of their parent's home and has to work a dead-end, minimal wage job to make ends (not) meet.

Not meaning to get political, but this is what Romney meant when he referred to the '47%' who the message of 'lower taxes' doesn't work on. Taxes have been cut so much in the last three decades that many people making great incomes pay only small or no income taxes. These tax rates are not maintainable. Us greedy middle-classers are robbing the next generation (debt) and the present generation's poor with our choice to only elect leaders that will lower our taxes.

[NorthernBlitz]

Jeez, how is everyone paying such low taxes?

So far mine seem the highest in this thread.

In our case specific case, we're a single income family (2 parents, 2 kids) and I defer a significant portion of my income tax using my 403b. We also pay about 13% of my income in property taxes, bringing my total tax load from about 15% to about 28%.

But, I consider the property tax (or at least half of it) to be discretionary spending because we choose where we live (the property tax also lowers our income tax).

[garth]

On a gross income of $241,000 (!!! doubled our 2015 income), we paid $11,250 federal, $15,400 FICA, and $9,600 state. That's just over 16%, which is absurdly low. Add in our property tax and the rate is 21%. Not sure what we paid in sales tax, but I'm sure it's significant.

[2Birds1Stone]

On a gross income of $241,000 (!!! doubled our 2015 income), we paid $11,250 federal, $15,400 FICA, and $9,600 state. That's just over 16%, which is absurdly low. Add in our property tax and the rate is 21%. Not sure what we paid in sales tax, but I'm sure it's significant.

You appear to be in the 33% marginal Fed tax bracket. Obviously this is before tax deferred comp, IRA's, etc.....but how do you manage to get Fed tax down to an effective 4.66%?

I am single, my W-2 Gross wages were $196k. I maxed out 401k, maxes out HSA, and still managed to only get Fed down to 20% effective -_-

[kayvent]

On a gross income of $241,000 (!!! doubled our 2015 income), we paid $11,250 federal, $15,400 FICA, and $9,600 state. That's just over 16%, which is absurdly low. Add in our property tax and the rate is 21%. Not sure what we paid in sales tax, but I'm sure it's significant.

You appear to be in the 33% marginal Fed tax bracket. Obviously this is before tax deferred comp, IRA's, etc.....but how do you manage to get Fed tax down to an effective 4.66%?

I am single, my W-2 Gross wages were $196k. I maxed out 401k, maxes out HSA, and still managed to only get Fed down to 20% effective -_-

I have a theory.

[garth]

On a gross income of $241,000 (!!! doubled our 2015 income), we paid $11,250 federal, $15,400 FICA, and $9,600 state. That's just over 16%, which is absurdly low. Add in our property tax and the rate is 21%. Not sure what we paid in sales tax, but I'm sure it's significant.

You appear to be in the 33% marginal Fed tax bracket. Obviously this is before tax deferred comp, IRA's, etc.....but how do you manage to get Fed tax down to an effective 4.66%?

I am single, my W-2 Gross wages were $196k. I maxed out 401k, maxes out HSA, and still managed to only get Fed down to 20% effective -_-

Married filing jointly, but no kids, so 2 exemptions. About $65k into pre-tax accounts, $6k health plan through work, almost 20k in mortgage interest and property taxes, spouse is 1099 with home office. All said, our taxable income was just over $110k, I believe.

[Gyosho]

AGI: 67717
Federal/State Taxes: 7216

Tax rate: 10%

Yippee!

[gombeargom]

I was in the 25% tax bracket, but my effective rate was 9.37%.

Not bad at all given U.S'. good infrastructure/schooling system.

[sol]

According to lines 56/37, we paid 12.1% federal.

That number is pretty bogus on both ends, though.

[lostamonkey]

Not meaning to get political, but this is what Romney meant when he referred to the '47%' who the message of 'lower taxes' doesn't work on. Taxes have been cut so much in the last three decades that many people making great incomes pay only small or no income taxes. These tax rates are not maintainable. Us greedy middle-classers are robbing the next generation (debt) and the present generation's poor with our choice to only elect leaders that will lower our taxes.

I sometimes joke that I should get to vote in American elections because I pay more US tax than 47% of Americans even though I am Canadian. This is due to withholding tax on my American investments.

I won't be able to answer the question from the OP until April. T3s don't usually come out in Canada until the end of March.

[kayvent]

Not meaning to get political, but this is what Romney meant when he referred to the '47%' who the message of 'lower taxes' doesn't work on. Taxes have been cut so much in the last three decades that many people making great incomes pay only small or no income taxes. These tax rates are not maintainable. Us greedy middle-classers are robbing the next generation (debt) and the present generation's poor with our choice to only elect leaders that will lower our taxes.

I sometimes joke that I should get to vote in American elections because I pay more US tax than 47% of Americans even though I am Canadian. This is due to withholding tax on my American investments.

I won't be able to answer the question from the OP until April. T3s don't usually come out in Canada until the end of March.

No taxation without representation? ;)

[mizzourah2006]

If you use straight gross, which would include 401k contributions, and HSA contributions, but disregard match, we paid the following:

Federal: 7.3%
State: 3.1%

If you use AGI we paid:
Federal: 9.2%
State: 4%

And our gross was ~$142k

[fdhs_runner]

With Traditional 401k, standard deduction, and EITC:

7.17% Federal income tax
6.2% SS
1.45% Medicare

WA uses a 9.3% sales tax instead of an income tax as other posters mentioned. I pay property tax via the rent, so unsure as to the exact amount.

[runewell]

According to lines 56/37, we paid 12.1% federal.

That number is pretty bogus on both ends, though.

This thread is ridiculous, everyone is creating their own denominator.

Frankly I would not use AGI on the tax return as the denominator, that number is going to be net of all 401k and other pretax contributions.  If you made $90,000 but stashed $10,000 away in your 401k, you still had $90,000 given to you in the year, not $80,000.

[Spork]

This thread is ridiculous, everyone is creating their own denominator.

Frankly I would not use AGI on the tax return as the denominator, that number is going to be net of all 401k and other pretax contributions.  If you made $90,000 but stashed $10,000 away in your 401k, you still had $90,000 given to you in the year, not $80,000.

I think you'll find that any thread that asks for anything like this falls into the same category -- even standardized things like "net worth" and "savings rate" ... people use formulas that are all over the place. 

[Al1961]

0% federal, 0% provincial.

Most of my income is either in tax sheltered accounts, or is unrealized capital gains. I'm drawing down my after tax account to fund retirement until age 60 or so, so expect this same tax rate for several more years. (Well, in 2017-2021 income splitting of DW's pension will raise my combined average rate to 5%, but that's just playing with numbers.)

Much better than the 33% average (42% marginal) rate paid for 2015. I must have been doing something wrong my whole working life - I never before had to suffer through the low rates of taxation that seem to have outraged another poster in this thread.

Al

[kayvent]

According to lines 56/37, we paid 12.1% federal.

That number is pretty bogus on both ends, though.

This thread is ridiculous, everyone is creating their own denominator.

Frankly I would not use AGI on the tax return as the denominator, that number is going to be net of all 401k and other pretax contributions.  If you made $90,000 but stashed $10,000 away in your 401k, you still had $90,000 given to you in the year, not $80,000.

One's intention makes the varying metrics justified. In your example, yes one could have received 90,000 dollars but 10,000 of those dollars will not be taxed until a later date. So they don't 'really' know the tax rate of that 10K until the entirety of the 401K is drained (possibly postmortem).

[secondcor521]

FIREd in February 2016:  -1.9% total income tax burden, calculated as (1040 line 56 + Idaho 40 line 32 - 1040 line 67 - 1040 line 69 - Idaho 40 line 42) / 1040 line 37.  Adding in SS and Medicare taxes and that would bring it up somewhere around -0.5%.

[McStache]

Gross Income: $94k (single, standard deduction)
Federal Tax: 11.9%
State & Local Tax: 3.6%
FICA: 7.1%
Total Tax: 22.6%

[Malaysia41]

I just filed our fed and state taxes using turbo tax. We live out of the country, so get a safe harbor provision on our state taxes. Most of our income was rents from real estate. Next, cap gains & dividends, next a bit of active income - about $2k.

FEDERAL AGI   $ 47,233
 Taxable Income        $ 18,433
 Total Tax                 $ 367
EFFECTIVE FEDERAL TAX RATE: 0.78%

CALIFORNIA Income $ 17,389
California | Total Tax $ 0.00
EFFECTIVE CALIFORNIA TAX RATE: 0.00%

Living off of savings is the way to go, tax wise, it seems.

[financepatriot@gmail.com]

Don't mean to sound snarky, but that sounds a bit high to me.

AGI:  105,626
Taxes:  $8279

Doing the math, our rate comes out to 7.8%.  We have two kids and dividend income taxed at 0%, just as an FYI since it will be tough to calculate these numbers. 

[hadabeardonce]

7.9% Federal ( $7,976 Total Tax [Line 63] / $100,119 AGI [Line 37] )
3.1% State of California ( $3,145 Total Tax [Line 64] / $100,100 AGI [Line 17] )

11.1% Combined

Sales tax is 8.75% here though...

[Spork]

Whew... I finally got the last of our tax documents.

straight effective rate: 6.7%
if you include ACA paybacks: 11%