Spanky
Thinks s/he gets paid by the post
The total tax rate is not really 46% or 50% since 33% is the marginal rate. The effective tax rate is the real one: (fed and state taxes paid+FICA+medicare)/AGI
Yes on FICA, but since I passed the $95K level, it's not included in my marginal (next dollar) rate.Alan said:wot? no FICA?(6.2% on the first $95K or so)
The question asked in this thread is about our marginal, not average or effective rate. That was in fact slightly higher than 46%, since for each additional dollar I earned, AMT phased out more deductions. 2006 average rate was a much more reasonable 31% after all was said and done.Spanky said:The total tax rate is not really 46% or 50% since 33% is the marginal rate. The effective tax rate is the real one: (fed and state taxes paid+FICA+medicare)/AGI
OK, earn $17,000 and put $15,500 into a 401k. You will pay FICA+medicare, but the rest will appear to be tax-free.Fed 28%
State 6%
Soc Sec 6.2%
Medicare 1.45%
total 41.65%
A big reasion I am still "retired" after staying home to raise the kids. Going back now - with what I can make even full time will not quailfy me for more social security than half of what DH has earned.Therefore SS & Medicare taxes I pay would offer me no benefits. If I did work full time our federal rate would probably go above 28% when the AMT did not snag us first.
ssssssssssssshhhhhhhhhhhhh NOT SO LOUD... the gov'ment will hear you and tax that too.... whoops too late, it's called sales taxSpend it all, enjoy it!
Remember -- spending your money is not a taxable event.
Spend only after-tax money from your taxable account = 0% tax