What is your marginal tax rate?

[Spanky]

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

 

[scrinch]

wot? no FICA?

(6.2% on the first $95K or so)

Yes on FICA, but since I passed the $95K level, it's not included in my marginal (next dollar) rate.

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

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.

 

[tryan]

Yeah then add in: property tax, excise tax, sales tax, gas tax, ... you get the picture. We're all paying MORE than we want to believe.

 

[GLM]

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.

 

[LOL!]

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.

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.

 

[Free_at_49]

When success means dying broke . . .

Spend it all, enjoy it!

Remember -- spending your money is not a taxable event.

Spend only after-tax money from your taxable account = 0% tax

 

[megacorp-firee]

Spend it all, enjoy it!

Remember -- spending your money is not a taxable event.

Spend only after-tax money from your taxable account = 0% tax

ssssssssssssshhhhhhhhhhhhh NOT SO LOUD... the gov'ment will hear you and tax that too.... whoops too late, it's called sales tax

 

[old woman]

I am in a 15% bracket and no state income tax. After 401K and house interest my income is very low. I am starting to worry about ALT MIN TAX, I will have to see what will make it kick in for me. I am getting more investment gains now outside retirement plans.

 

[bongo2]

45.5%

Federal: 37.5% (26% * 1.25 AMT + 5% Child credit phase-out)
State: 8% (7.8% + 0.2% federal deduction phase-out)

These are additive since I pay AMT.

It is a good idea to pay attention to your true tax rate (with all the adjustments and phase-outs), not the rates in the tables.

 

[wheel9]

Fed 33%
State 9.3%
Medicare 1.45%
No FICA since agency is out of SS.

Now I know why I want out!

 

[bongo2]

How could I forget FICA! With Medicare it's 47%.