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OK, I run the risk of being flamed for a possibly naïve question, or I may be lambasted for not having consulted Google Uni first (which I have, to no satisfaction...hence I come to the City Data school of hard knocks).
My question is...
How much Income Tax does one pay in the USA?
I appreciate that there will likely be a number of variables to consider here (most likely being which state one resides in) - but could someone please, just for the sake of the argument (which is in fact what I hope to avoid) help me by advising what tax one would expect to pay if earning an income of $50K, $100K, and $150K in the USA?
If possible, could you give some examples of differing state levies on these incomes too?
Any other information I can add to help give a more specific answer here?
In most states there are 3 distinct taxes - Federal, State and City. The Federal tax is dependent on level of income, City and State taxes are too and are also dependent on the particular city and state that you earn your income in. For example, people in Florida do not pay state taxes.
Looking at this tax bracket for 2014 The 2014 Tax Brackets | Tax Foundation you can expect to pay between 25% and 28% in federal taxes for the income levels you listed.
I live in NY, so I have to pay another 6.5% in city and state taxes.
the tax brackets aren't exactly accurate in how they look in the tables either because income is taxed marginally (not sure I got the terminology correct)
So if someone is taxed at 25% because they made more than 40k, they aren't paying 25% on the entire 37k. It works its way up, so 10% on the first 10k, then 15% from 10k to 40k then 25% from 40k to 90k.
yes states/cities have their own taxes too also "income" is an interrupted word, if you have all your income coming from capital gains, it is taxed at 15% if above $40k (below is 0%) or if it comes from bonds which is taxed differently as well
Don't forget Social Security and Medicare. Often listed together on your check as FICA, SS is 6.2% of the gross until you earn $117,000, at which point it is zero. Medicare is 1.45%.
Between these two items most people will see a 7.65% payroll deduction.
OK, I run the risk of being flamed for a possibly naïve question, or I may be lambasted for not having consulted Google Uni first (which I have, to no satisfaction...hence I come to the City Data school of hard knocks).
My question is...
How much Income Tax does one pay in the USA?
I appreciate that there will likely be a number of variables to consider here (most likely being which state one resides in) - but could someone please, just for the sake of the argument (which is in fact what I hope to avoid) help me by advising what tax one would expect to pay if earning an income of $50K, $100K, and $150K in the USA?
If possible, could you give some examples of differing state levies on these incomes too?
Any other information I can add to help give a more specific answer here?
Arigato!
Foibles/
This is a very loaded question because Congress tampers with the tax code as a way to affect fiscal policy. For instance they can create a tax credit that encourages people to go back to College, or to have more kids. This is why there is a difference between your "tax bracket" and your "effective tax rate." You could spend the better part of your life learning the tax code and still have no idea what the answer to this question is. If you are bored and want to have a user friendly way to learn about US income taxes then play around on HR block or TurboTax's tax estimator. And that's just FEDERAL tax.
If you are a rich or well-connected member of the elite, you pay almost nothing. If you sit at home all day watching TV, playing video games and smoking weed, you pay nothing or actually get money sent to you through the earned income tax credit.
If you are not politically connected and do what you are supposed to (i.e. have a job, don't commit crimes) you will pay anywhere from 20-60% depending on where you living and if you also have to pay state and local taxes in addition to the federal tax.
If you are a rich or well-connected member of the elite, you pay almost nothing. If you sit at home all day watching TV, playing video games and smoking weed, you pay nothing or actually get money sent to you through the earned income tax credit.
If you are not politically connected and do what you are supposed to (i.e. have a job, don't commit crimes) you will pay anywhere from 20-60% depending on where you living and if you also have to pay state and local taxes in addition to the federal tax.
60%?
Where in the US are people paying 60%?!
I live in NYC, which has pretty high taxes, and I pay about 30%.
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also "income" is an interrupted word, if you have all your income coming from capital gains, it is taxed at 15% if above $40k (below is 0%) or if it comes from bonds which is taxed differently as well
