![]() ![]() Once taxes are taken into account, this number drops to $55,180. That’s ¼ of your income going straight out of your pay. This brings the total tax rate for federal + state income tax to 25%. If you don’t live in those states you’ll pay anywhere from a low of 0.36% all the way up to 13.3%.įor this article, I used an estimated average state income tax of 4.5%. The seven states with no income taxes are Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming. Unless you are the lucky resident of one of the seven states with no income tax, you will pay state income tax. Once you take into account state-level income taxes, even more money is taken out. However, this only takes into account federal taxes. ![]() Making $80 when you were expecting $100 can be a tough pill to swallow, but taxes are a part of life. That means that over $20 dollars are collected for every $100 earned. ![]() The average federal tax rate for a family earning $73,573 is 20.5%. If you’ve ever started a new job and were surprised by how low your paycheck was compared to what you were expecting, then you’re very familiar with the effect that taxes have on your income. The Average Federal Tax Rate is 20.5% For U.S. Over the course of the year, you’ll pay the same amount in taxes, but you’ll get your money sooner so you can invest it right away instead of waiting for a refund the following year. Protip: Update your W4 Form with your employer if you’d like to see your paycheck increase in size and have fewer taxes taken out. It’s important to note that this is before taxes, so, unfortunately, that means that the average household isn’t actually bringing home over $70K in cash every year since a big chunk will go to taxes. The first thing that jumps out is the average income before taxes of $73,573, which is higher than I expected it to be. The most recent data published was for 2017 since it takes a lot of time to tabulate the data for an entire country. Bureau of Labor Statistics publishes the average expenditures and income for households. Let’s dig into where the average American family is spending their money and what they could possibly do turn things around. being a top 10 country in terms of average income, where is all of that money going? It’s a sad reflection of the fact that wages simply haven’t increased as the economy has grown, while average household expenses remain too high.īut with the U.S. We’ve all seen the headlines that the average American household doesn’t have enough money saved for an emergency and lives paycheck to paycheck. ![]()
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