Your 2016 net income tax rate

[kayvent]

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.

All due respect, and i get your point, but isn't there also greater than 7% going to medicare and ss? It seems a little disingenuous not to include that in your 14.7% does it not? Maybe I'm thinking about this incorrectly though..

Calculating these rates are always strange. I myself don't see CPP premiums or EI premiums in Canada as taxes. A simplification of my reasoning is this: unlike taxes where a person's direct benefit from government spending is unrelated to the quantity of taxes they pay, every marginal dollar I put into the CPP affects a number in a formula that will benefit me or any survivors.

What to include in taxes is a matter of debate but as has been alluded to earlier in the there, what to include as income is also a matter of debate. For example, should investment income in a taxable account count as income in this formula? Tax-advantaged accounts? Should transfer payments count against the taxes one pays?

[BTDretire]

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

That number is pretty bogus on both ends, though.

Yes Sol, I agree.
On my form using lines 56/37, I paid 1.28% Federal and no state.
If I add back in my HSA and SEP contributions I paid 0.97%.
However, I'm self employed so I pay both halves of SS, If I go
line 37 / total taxes paid, I get 16.8%.
 And then if I use line 22, "total income" / line 56, I get 0.8% Federal.

   So, maybe we needed a better definition about 3 pages ago.
 I had a very low tax rate, but I have two kids and college expenses
that get me a couple of different credits, that saved my about $3,800,
in taxes, but cost me a whole lot more.
 I also had another 7% of income as ordinary income with 0% tax.
When you start discuss things on a tax form, it gets convoluted quickly.

[BTDretire]

Gee, I'm sorry, I said something that killed the thread?  :-)

[FINate]

This was our first time filing after a full calendar year of FIRE (going on 2 years now). I was a bit worried because we never did estimated payments or any other withholdings. Our income is all passive so no payroll taxes. I was anticipating (e.g. planned for) having to send a $5k - $10k check to the feds and somewhat less to the state.

Even though we didn't withhold anything throughout the year we got money back! We're in a sweet spot w.r.t. gross income, ACA subsidies, and depreciation on investment property. From what I can tell, we got money back because our ACA subsidy should have been higher during the year, and for the first time ever we can actually claim the child tax credit.

So our rate was slightly negative? I think this is dumb but I didn't write the laws, and happy to "get some back" after years of paying outrageous amounts (my combined state+fed top marginal rate was once >50%).

[runewell]

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).

The thread says 2016 tax rate.  People aren't interested on what taxes I will pay on my IRA in the year 2032.

[Laura Ingalls]

Federal rate was about -2%
State rate was about 5%
My state taxes all capital gains as regular income

[Dicey]

I totally lost track of this thread. As promised many weeks ago:

Federal Rate: 8% (15.3%)
CA State: 0% (4.3%)

This was significantly lower than last year (in parenthesis). Our 2015 income was 64k higher, because we flipped a house for fun and profit. We used the profit for a DP on another rental property.

[runewell]

My taxable rate was 6.6% federal and 3.7% state on a low 6-digit income.

[valsecito]

For single employees in Belgium:

* ~35% social security contributions (employer side) before calculating the amount that gets considered for taxation
* plus 13.07% social security contributions (employee side) after calculating the amount that gets considered for taxation
* tax brackets, to go from gross to net:
 

up to 7.130€/year

0% 7.130€-10860€/year 25% 10 860€-12 470€/year 30% 12 470€-20 780€/year 40% 20 780€-38080€/year 45% 38080€-unlimited/year 50%* plus local tax. Differs, but usually around 7% extra on the federal tax amount. So for a 50k€/year gross wage after 35% employer social security contributions, before personal social security contributions: * -6535€ of social security contributions, leaving 43465€ * -18485€ of federal taxes, leaving 24980€ * - 1294€ of local taxes, leaving 22686€

[CoffeeAndDonuts]

FINALLY got our taxes filed last week.

Married, 1 kid. 1 W2, minor loss on a K-1, and a slightly lower than target year for our single owner LLC consulting business.

Total income (1040, line 22): 151.8k.
AGI (line 37): $94.6k
Taxable Income (line 43): $52.7k.
Income Tax (line 56): $5.3k
SE Tax (line 57): $11.9k
TOTAL Federal Tax (line 63): $17.3k.

Federal tax rate ranges from 3.5% (income tax only against Total income) and 11.4% (total tax against total income).

Pretty happy with it!

In 2016, we maxed out a solo 401k's pre-tax capacity, a simple-ira, 2 roth-ira (we were in a low tax year for us), an HSA, did a roth conversion triggering a little tax, did some charity and benefited in a very surprising and strange way from our triggering AMT in 2015.

The AMT was the strange one to me... In 2015 we sold a rental property and had significant capital gains. That triggered AMT which then caused our deductions to be capped. We received a not-small state tax refund (1099-G) for 2015 nonetheless. I expected this to be added to our 2016 income but apparently (and logically), if you couldn't deduct the state taxes in the prior year (b/c AMT), then the refund of them isn't added to your income. That helped a bit... but I'd likely have held back on charity a little bit for 2017 which looks to be a high tax year. Tax planning is hard.