Federal Income Taxes - How Much Paid

[GMueller]

From prior polls it appears that quite a few high net worth individuals frequent this board. I'm curious how successful members are avoiding the tax bite. I had a good year in 2006, primarily because I worked for 8 months in Iraq. I just filed my return. Uncle Sam took a little over $35K out of my hide. My wife and I have no significant deductions and most of our income is from salaries, we find it difficult to avoid the bite.

 

[kramer]

Do you want us to count federal income taxes only and to exclude Social Security, Medicare, state income, and state disability taxes? I am just trying to get a handle on the definition. For a self-employed person in my state, the latter taxes would typically be larger than their federal income tax bill unless they earned 6 figures.

Thanks,
Kramer

 

[Outtahere]

I'm not even close to getting mine done yet but just from what I paid in estimated I know it's over $40k

 

[jazz4cash]

Alrighty, then..........feel better now...eff rate of 9.95% according to TT. Last year was 6.44%, so I was feelin blue before this poll.

 

[Sam]

The absolute amount paid has little meaning.

2K paid by someone with a gross income of 40K is not the same 2K paid by another earning 100K. Anyway, my contribution to uncle sam's fund this year is 12% of gross income.

 

[TromboneAl]

It's pretty neat how retiring works with regard to taxes. I only paid 3.6% of my 2006 gross income in taxes. Over each of the next years I will convert to Roth an amount that puts me in the 10% or 15% tax bracket.

IIRC, we were in the 50% tax bracket for some of the years that we deducted IRA and SEP-IRA money (brackets were higher back then). Now I'll get much of it out at the 15% level, after it's compounded tax-free for many years. Cool.

 

[Sam]

It's pretty neat how retiring works with regard to taxes. I only paid 3.6% of my 2006 gross income in taxes. Over each of the next years I will convert to Roth an amount that puts me in the 10% or 15% tax bracket.

IIRC, we were in the 50% tax bracket for some of the years that we deducted IRA and SEP-IRA money (brackets were higher back then). Now I'll get much of it out at the 15% level, after it's compounded tax-free for many years. Cool.

Stop bragging Seriously, I will be in your shoes in a few years. However, my estimate tax rate will still be higher than yours, 6 to 8%. I guess it's because my income will be mainly from tax deferred accounts.

 

[donheff]

While DW keeps working our Fed tax is almost as big as our retirement budget. I guess that is a good thing.

 

[REWahoo]

It's pretty neat how retiring works with regard to taxes. I only paid 3.6% of my 2006 gross income in taxes. Over each of the next years I will convert to Roth an amount that puts me in the 10% or 15% tax bracket.

...Now I'll get much of it out at the 15% level, after it's compounded tax-free for many years. Cool.

Yep, similar story here. Our taxes for this first year of retirement were 18% of what we paid my last year in the w*rking world. Poor Uncle Sam.

 

[Retire Soon]

We retired in the middle of 2006. Our federal taxes for that year were 32% of what we paid in 2005, the last full year that we worked. This percentage should look much better in 2007.

 

[cute fuzzy bunny]

$2719.

HAH!

 

[NinjaPigeon]

Apparently you guys know some tricks I don't Low six figure AGI, effective tax rate of 20.11% according to TurboTax.

 

[Gone4Good]

I'm curious how successful members are avoiding the tax bite.

Wage slaves, even high priced wage slaves, can not do much to avoid the tax man.

 

[wabmester]

Yup, having very little earned income helps a lot.

Actually, having just enough earned income to fully fund your and your spouse's IRA seems just about perfect.

 

[cute fuzzy bunny]

Low earned income, high pre-tax contributions, lots of qualified dividends and long term gains, some old capital losses from the 2000 crash to judiciously offset bad tax years (LIKE THIS ONE COMING UP), and keeping yourself within the limits of the 5% qualified dividends/long term gains range. And my little 2 year old tax deduction is also paying off big

 

[RetireEarly50s]

Just a little over 2K and only a 3.3% tax bite according to Turbo Tax. Income was in the 70-80K range but a lot of it non-taxable and then with all the 401K deductions, interest on mortgage, and Roth IRA credits came out pretty good.

 

[GMueller]

Hmmm . . . the median federal income tax bite appears to be roughly $25,000 for members of this board. I'd say we do our fair share to support Uncle's spendthrift proclivities.

 

[TromboneAl]

With 92 respondents, and making an assumption that the average tax paid by people in the >40K club was 70K, the average tax paid comes to $32,690.

 

[REWahoo]

With 92 respondents, and making an assumption that the average tax paid by people in the >40K club was 70K, the average tax paid comes to $32,690.

This is one of the few times in my life that I'm very happy to be well below average!

 

[Texas Proud]

WOW....

A lot of people making a LOT of money on this board.... $40K and above means you are RICH,.... RICH I say.....

I remember way back when I did taxes and we talked among ourselves as to the hugh tax bills we would see (one guy paid $10 mill per QUARTER on estimated taxes)... most people would say "I would hate to have to pay that much"... I always said "I would LOVE to have to pay that much"... just think how much I would have earned in order for me to pay it!!!

 

[Telly]

Aww, the lowest poll selection is <5000$.

I was hoping that there would be a $0.00 selection, I wanted to see if anyone other than me was at 0$. Its $0 again this year, it won't always be that way.

 

[justin]

I was hoping that there would be a $0.00 selection, I wanted to see if anyone other than me was at 0$. Its $0 again this year, it won't always be that way.

I was below zero last year due to a refundable child tax credit.

 

[Telly]

I was below zero last year due to a refundable child tax credit.

Oh yeah, showoff? Well, well, there's always next year!

I don't think they'll let me refund any of my childs...

 

[justin]

Oh yeah, showoff? Well, well, there's always next year!

My days of subzero tax liability are gone for a while now that I earn too much. But that is a good thing!

 

[bow-tie]

When my donations to Uncle Sam begin to creep up on my total annual expenditures, I get a little spooled up...