Originally Posted by
cencal83406
I only claim one exemption, and my breakdown for 2010 is as follows:
Federal - 13.4%
State - 4.7% (GA)
Medicare - 1.5%
SS - 6.6%
Income tax liability (I'm overpaying, by the way) is 26.2%... Taking the easy way out, TurboTax (I don't file flight crew tax deductions, but based on the returns I've heard I think I'll start), my return was 19% of the total amount paid... so, my effective rate for 2010 was 21%
Judging by the numbers of similar longevity pilots at my company, I could have had an effective tax rate of 13.1% approximately, based on the available deductions for flight crew...
Exceptions exist at both ends of the spectrum. The real cost of medicaid and SS is 15.3 %, it is just that your employer pays about half of that very real tax. That is money you don't get as a result.
Did you consider property tax? Even if you rent, you are paying it. Did you consider the hidden costs of corporate tax? You are paying those too, every time you buy something. Once you get beyond the simple methodology of turbo whatever, you will find many things you may not be aware of at all. They like it that way.
By contrast, many large metro area residents pay a real rate near 50% when all taxes are considered.
Tax In the U.S.A. - 6+ Months to Government
The following is an example of an actual individual's tax rate. The graphic artist's salary was $45K, effectively $48K when you add the extra charges from the government. For more than six months of the year she effectively worked for the state - politicians who represent maybe 20% of the populous, if they are lucky, then decided what to do with more than six months of her labor.
CALCULATING REAL TAX RATES
Annual
Monthly
Gross Employee Pay
$ 48,443
$ 4,037
Salary
$ 45,000
$ 3,750
Federal Withholding Tax
$ 8,184
$ 682
Medicare Employee Tax
$ 653
$ 54
Social Security Employee Tax
$ 2,790
$ 233
CA Withholding Tax
$ 2,335
$ 195
CA Disability Employee Tax
$ 360
$ 30
TOTAL Withheld From Employee
$ 14,322
$ 1,193
Net Take Home Pay
$ 30,678
$ 2,557
Federal Unemployment - Employer Tax
$ -
$ -
Medicare Employer Tax
$ 653
$ 54
Social Security Employer Tax
$ 2,790
$ 233
CA Unemployment Employer Tax
$ -
$ -
TOTAL Employer Tax
$ 3,443
$ 287
TOTAL Wages TAX
$ 17,764
$ 1,480
Tax Rate On Wages
37%
37%
Other Taxes
8% Sales Tax on 60% of Net Take-home Pay
$ 1,473
$ 123
1% Property Tax Ave Home Value of $500K
$ 5,000
$ 417
Telephone Tax
$ 230
$ 19
Road Tax
$ 375
$ 31
Gas Tax
$ 347
$ 29
Other Tax Total
$ 7,425
$ 619
Tax Rate on Other Taxes
15%
15%
TOTAL TAX
$ 25,189
$ 2,099
Actual Total Tax Rate
52%
52%