Your effective federal tax rate for 2011
 

Just for grins, as you finish up your taxes for the year... Figure out what you actually owe/pay the gov't for federal income taxes for the last year, and divide that by your total income.

I had another kid (3 now) and my wife works at home, I was shocked at how low my actual amount is given my income... I'm not done with my taxes yet, but its already looking like its going to be under 2%.

I haven't done mine yet, but I got my 1099 last week and just about fainted. I'm going to owe some money this year.

Effective tax rate will probably wind up at around 35-40%.

I distinctly remember about 2 years back you having to write a check for around 50k to the IRS for your taxes. So is there ever a year that you don't owe money?

Here are 2 laws that will make for REAL change:

- No withholding taxes from paychecks - all taxes due on April 15th; you write a fatass check to the IRS

- All elections, local and national, on April 16.

It wasn't quite $50k.

I was a good boy this year- did my estimated taxes conservatively and everything. I just happened to land a couple of big jobs that kinda paid more than I had anticipated...


In a perfect world, no. If you don't owe money than you overpaid.

I agree that this would make for some changes in the tax policy, at least in the short term.

Unfortunately, we're already deficit-spending as it is. Reducing the amount of money collected in taxes is not going to automatically decrease our spending.

If you are using the numbers Mr. Ferrell is (line 60 61 / line 38 on the 2011 1040), you may need a better financial planner. ;)

I would expect we will fall between 12% and 19% this year as measured above.

And increasing revenue isn't going to stiffle it either...in fact the opposite effect is always the norm.

Wouldn't work - what percentage actually pays enough federal income taxes that it makes them unhappy?

Also, the first law that would be passed would be to require employer witholdings of anticipated income taxes.

Just sayin'

Edit: I'm at 9.8% effective tax rate for 2011

Looking at 14.1% filing jointly.

Going for beer with Romney brb.

I assume you mean line 61/38.

I am single, with no dependents and no mortgage.

I am self-employed, so I have to file Schedule SE and pay an additional 13.3% tax on my gross (sans deductions), above and beyond the normal income tax.

None of my income for 2011 was from capital gains.

if my w2 would ever show up..........

Realistically speaking, that would be 53% of Americans. (The percentage who earn enough to pay any Federal income tax at all.)

Nobody (except Buffett) is going to say "No, I don't think I pay too much in tax."

However, it's my personal opinion that it is unfair that I, a non-millionaire, have to pay considerably more (both as a percentage and in whole dollars) then anyone else who receives the same level of Federal services.

So in that way, it's not really a fair scenario to begin with.

Yeah, we're comparing two things that just aren't directly related. Tax revenue just doesn't affect spending in a meaningful way. If you fix spending (fix meaning that federal spending is less than tax revenue) then taxes will naturally tend to decrease. (There's no doubt that "we" would not tolerate the government racking up a surplus of tax dollars for very long.)

Damn you Joe for correcting your sand deductions! I had a funny, but it wouldn't make a damn bit of sense now.

Ours looks to come out to about 14% effective. We take full advantage of all possible qualified tax deferrals like her 403B and such.

That's ok, go ahead and make the joke.

For everyone else, I previously wrote "I have to file Schedule SE and pay an additional 13.3% tax on my gross (sans deductions)"

Now it's over hyped and would suck. I will reserve my talent for another day. One day when you aren't so quick to edit your post I will be there. Oh I'll getcha

33% because I claim the FEIE.

I don't know how true it is, but I heard once that some big union like IBEW got all their members to claim 99(2-digit field max) deductions, so no tax was withheld all year. Instead, the workers put the money in a union-sponsored savings account and paid up on 4/15. The gov't freaked when they realized the cash-flow implications if this spread, and that's why there are now big penalties for underpayment.

So what you're trying to say is that you're not paying you're fair share, you're a racist fascist, and you should be burned at the stake?

That's how i read that, as well, Brain. :-)

I'm waiting for a 1099 so i can plug in all my numbers and my unmarried, non-child-having, no-mortgage ass can find out i'm paying 35%+ effective again this year...

heading out for lube.

You bet your ass

I need to make a slight correction in my numbers. I forgot to add in pretax retirement benefits. Effective tax rate is more like 13%.

put that in your right wing and smoke it.

TurboTax has a line that says my Effective Tax Rate is 6.40%. This means I am either in the 1% and all my money is hidden over seas, or I make less then the poverty line and they feel bad for me. Unfortunately it is the second reason. I really need to start working full time this year.

Interesting. Except for the 0%, I think I know where most posters fall in this.

Should have included several negative % options in the poll, seems like most people I know get massive tax credits.

Pretty sure I'm around 3-5%. Single, low income, with lots of schedule a deductions.

* edit - Just checked the numbers and I'm paying 6%

I was working on my taxes for the last hour. I'm anticipating finishing around the 15-16% range this year.

In 2010, I received a long term capital gains loss statement the day after filing. I've yet to file the amended return...but have 3 years to do so. (Since Uncle Sam isn't getting any more money from my loss, I'm not sure it's high on his priority list either.) This brings light to a question, though. Should I include the capital loss carryover on my 2011 return although it is not currently represented on my 2010 return? OR do I file the 2010 amended return now along with the 2011 return?

I've learned this year that our tax system is way to complicated. First time homeowner, marriage, cap gain carryovers, grad school, charitable contributions, interest in and out,...ahyayyay my brain hurts! Should get some cash back this year, which should mean we can adjust our take home pay for next year to boot!

If it were me, and you don't need the return of your tax overpayment in the near-term, I would consider filing an extension for 2011 and the amended return for 2010.

I would also ask yourself if the time, aggravation and mistakes are worth the $200 - $300 per year you are saving by not using a CPA. I would think, in Chicago, you also are likely to have state and possibly city taxes on top of Federal as well.

I agree. In fact, I used a tax service for 2009 to learn what i needed to file the and then H&R block deluxe at home in 2010. Im going to call a local tax attorney today to get their take. The refund will go to home improvements this spring...

If you know the tax attorney, give him a call. If you are just pulling a name from the Yellow Pages (.com?), then I would offer an alternative:

Ask some of your more professional friends (or parents' friends, depending on your age) for a referral to a CPA that they would recommend.

I think most of the users on this board are as capable as most of the people at H&R Block for answering computer-prompted questions and filling in questionaires. In my experience, they have not been a real "value add."

Taxed:
Base Pay: $75,804
Flight Pay: $7800
Flight Bonus: $20,833
$104,437

Untaxed:
Housing: $31,104
Subsistence: $2879.04
$33,983

I put $15k into TSP, $5k into an IRA, and claim 1 exception:
Gross: $138,420
W2: $88,648.34
Tax Withheld: $16,837
%age: 19%

We are 4 years into a 30yr loan 6%/$360k, and have 2 kids, but rent the house for $2k a month which covers the mortgage. I claim some business expenses and a small amount of donations... usually under $2k though. I am a resident of Florida and have no state income tax.

FINAL:
8.8% = $7800... and got an $8k return.

We've used H&RBlock for the past 4 years after TurboTax royally fucked us 2 years in a row. I really can't complain about making as much as I do and still paying single-digits. What I can't understand is why I'm so damned poor!

I definitely need to move to FL or TX. VA is just milking me for 5.25% and I'm only there for a few weeks a year, if that.

Federal “ income tax” is not the only income tax you send to the federal government. Your tax return doesn’t include Social security and Medicare tax% withheld from both you and your employer on your earned income. Self-employed people get to see all the tax at once when they file a return so they can get the shock of reality. For most people making below ~100k the actual % of revenue they send to the federal government is closer to 15.3% of their gross income plus the percentage shown on their tax return. The payroll tax holiday last year took 2% off the employee portion making it 13.3%. It is taken out before any deductions even 401k contributions.

Look at your W-2 take the FICA withholdings, double the number because it only shows half of your compensation % sent to the federal government add it to income taxes paid on your tax return then recalculate your real federal tax %.

For obscenely rich people the FICA percentage is neglagable because it stops at a little over 100k and it is not withheld on un earned income from dividends and capital gains.

Bob

I can't remember my login info for taxslayer.com, so can't access my return to get the numbers (yeah I know, I should have printed it).

Anyway.

Taxable: (only taxed half of the year due to deployment)
Base pay: 31,440
Incentive pay: 3,600
Totes: 35,040

Untaxed:
Subsistence: 3,900
Housing: 13,500
Total: 17,400

Grand total: 52,440

I don't feel like looking up any other figures, but I got a $7800 refund. EIC x2, some money into my Roth, mortgage interest.

So everyone is using the same metrics, that's your taxes owed (correctly identified above by Joe as line 61 on the 2011 form and 60 on the 2010 form) divided by AGI?

[Edited by me.] Relatively high savings rate?

For the self-employed, they do get to deduct half of the self-employment tax resulting in (theoretically) the same approximate net effect as employees.

That's the orange. Useful to compare against other oranges, less so the "apples" most often reported (and even less so the "grapes" or marginal bracket rates most people think of when they hear tax rates).

Very true. And, a mid-year cancellation of the payroll tax holiday would adversely affect lower and middle income citizens more than the top income earners because they max that payment in the first portion of the year.

You are better at this game than I am, because I cannot figure out how 44% of the people in the poll have effective federal income tax rates as a percentage of their AGI* over 25% with 3 of them being 35%+.

* Line 61 divided by line 38 on the 2011 return

Either people are making apples to oranges to grapes comparisons or they are in need of some serious financial and tax planning advice (or I am having the dumb and overlooking something obvious).

probably high income renters.

15% and owe monies.

Assume AGI of $300k, single, no kids, standard deduction (i.e. no itemizing due to mortgages, charitable gifting, etc).

That should put the taxable income somewhere around $290,500. Self-employment, pass-through income, etc will tweak this somewhat.

That puts the marginal rate at 33% and ballpark Federal income tax at $80,762.

$80,762 / $300,000 = 26.9%

Sorry if I wasn't clear... I paid a total of $7800 in Federal tax this year, which is 8.8% of my taxable income. Between my investments/mortgage/kids, I was essentially able to halve the amount I paid in taxes this year. I could claim more exceptions and have less money taken from my paychecks, and not have as big of a refund. And I don't have the vocabulary to decipher what Joe was saying.

And yes, I've managed to "save" over $20k this year between TSP/IRA/Investments. But my wife really handles all this ----. I can't wait until she goes back to work and we're in a stable housing situation... then I will be back in the Miata "game".

I think its total BS to not count all the revenue the federal government takes from your earnings. Working people all the way down to the dirt poor pay a considerable amount of federal taxes not included in there tax return. People making significantly more than 100k or with huge amounts of un-earned income do not.

Apples to apples, is the total amount the federal government took from you divided by the total amount you made as income.

I realize that is not the number right wingers like to use, because they like to make it look like nobody pays taxes but the wealthy but that is just not true.

Bob

I misread what the poll was asking for apparently. I though bracket was what was in question. I can't change my vote, but I'll be paying ~18% in Fed Tax and like 3% to VA.

40% of federal revenue in 2010 came from tax on income from working that is not accounted for on tax returns, “Payroll Tax” It is paid primarily by people making less than 100k and many of them pay income tax on top of that payroll tax making the true tax rate much higher than the oligarchs want the ignorant to believe. All forms of federal tax you pay goes into the same bucket. It is all tax and should be accounted for as part of your tax burden not just the tax shown on your return. apples to apples.

If you make all your income from working you and make less than ~100k individual you start at 15.3 % for instance. And then the numbers calculated from your tax return adjust from there.

I am telling you, this subject is confusing for most people. Are you dividing your Federal income taxes paid by your taxable income or your adjusted gross income (AGI)? They are different numbers. Your taxable is less than your AGI.

Like I said, it's a confusing subject for most people which is a testament to how knackered the tax code is these days that we can't even have a reasonable discussion about one metric among some very intelligent people.

Fine, Bob. :facepalm: Total taxes paid is the "apple" and Federal income tax divided by AGI is the "orange," but this thread started out with comparing the latter. My point is not that one is more or less relevant than the other (I would argue that total taxes paid in is the more legitimate measure), but that people are not using the same metric in their comparisons.

It does not make sense to compare marginal versus effective Federal income or effective Federal income vs effective total Federal (or effective total Federal + total municipal).

Do you understand that point or not? :crx:

Yes, you do get to deduct one-half of the Schedule SE tax on the Form 1040 tax.

This is not the same, however, as being a regular employee. If you have a W2, then your employer pays "their half" of what would otherwise be the SE tax directly, so it's an invisible transaction that does not affect either your salary or your net income at all.

By claiming 1/2 of the SE tax as a deduction, you only lower your net tax by (1/2 of SE tax * your effective 1040 tax rate).

So all they're doing is not making you pay tax on half of the money that you used to pay the SE tax. It's still quite costly.

Just a tick over 5%.

Benefits of home ownership:

This year: over $3500 refund based on single tax withholdings & half year home ownership (not allowed to include last years property tax as a deduction since it's 'seller paid').

Next year: over $25,000 itemizing and $60 MORE per paycheck staying in my wallet instead of Uncle Sam's. That's $1560 MORE in yearly take home pay versus when I was renting. Check your finances! I'll take home ownership over renting any day of the week!

21% Federal for 2011, 31% in 2010. VT taxes add a bunch to the % of total taxes.

I am confused now.

untill you gotta replace a roof, or the hvac, or the foundation is cracked, or you have termites...

I was thinking the same thing Brain. It's no cheaper, its just deferred cost.

This. I had an internship over the summer, made just under $10k, and am getting ~$630 back. When do I get my free loan from the gov't?

Just started doing my taxes for 2011. This one's gonna hurt. I maxed out Schedule SE line 10 by quite a large margin, even after $50,897.65 in Schedule C line 28 expenses.

Why the hell don't I feel rich? The IRS clearly thinks I am.

I had a job last year that required me to live in a different state for a few months. It was lovely paying that state's revenue tax along with my home state's residence tax. I was at an effective tax rate of 33% at the time because of it, and I was not making much money. I will get most if not all of it back, but still...

Quit school and adopt a few kids. I hear the going rate is just over $13,000/year, refundable...better than intern pay! ;)

total income: 14% federal, 18% when you factor in my CT and MA taxes.
taxable income: 17% fed, 23% states


Could be worse I guess. Only thing I have going for me is my student loan interest but hopefully I can pay them off in a few years.

Well, that was fun.

Total gross receipts: $192,055 (Schedule C line 1d)
Total expenses: $50,897 (Schedule C line 28)
Adjustments & Deductions: a little over $15k (1040 lines 36+40)
Total Fed tax: a little over $42k
Effective Federal tax rate (line 38 / line 61): 32.4%

Add in a little over $9k in CA tax and I'm at 39.5% total for the year. Called it in post #2.

Time to write another big damn check.

Sam, as a fellow member of the six figure club, I seriously want to know how the hell you're getting away with 8.8%.

Think you can swing a condo mortgage payment in Florida for ~$750/month and live there for 183 days per year? Between the mortgage deduction and lack of state income tax on earnings, you could put that $9k/year in to something with some utility/price appreciation potential. That especially might work out better if you can do short-term rentals (think: Daytona, Cocoa, New Smyrna, Clearwater, etc).

How about a pre-tax retirement plan? Even if you are a 1099 contractor vs W-2 employee, you can may be able to set up a self-employed plan like a SEP or solo-401k to reduce your taxable income.

Moved from 25% to 28% marginal (in large part due to a one-time bonus) and from 16% to 20% effective (MFJ). Paid about $15k more in taxes this year. Some of my planning got skewed by a last-minute, unexpected, one-time bonus (a good problem to have). Income probably won't be as high for 2012.

We have also increased our charitable gifting and retirement savings.

I just did my taxes. Took me four hours.

Am getting back a ridiculous amount of money.

Active interest vs passive interest FTW. yay.

Also, uncle sam rewards those who put their money "at risk" for potential business gain.

Indeed. I had to drop one grand today on a busted water heater. And one of my bathrooms needs retiling. And kitehen needs granite and demeyere pans.

Joe you have enough moolah to live as you please, for the most part. I spent xx,xxx last year on food and drink. Time for you to step up from crappy ol captain n coke. Day to day niceties can help you enjoy your income much more.