Real Personal Finance

022 - How Does Our Tax System Work?

Listen

Description

    1. Everyone pays $1,905 on first $19,050 of taxable
    2. $140k taxes at $400k?
      1. 35% tax bracket
      2. Actual taxes = $91,379 (22.8% taxes)

Tax Rate

Taxable Income Bracket

  

10%

$0 to $19,050

  

12%

$19,051 to $77,400

  

22%

$77,401 to $165,000

  

24%

$165,001 to $315,000

  

32%

$315,001 to $400,000

  

35%

$400,001 to $600,000

  

37%

$600,001 or more

  
    1. Standard deduction - $24,400
    2. Itemized - mortgage interest, state/local taxes, charitable giving, medical expenses over 7.5% of AGI
      1. States have separate tax brackets too
      2. Social Security @ 6.2% up to $132,900; Medicare @ 1.45% not capped 
      3. Different types of taxes for earned income, capital gains, dividends

LET'S CONNECT!

James

Scott

ENJOY THE SHOW?

Don’t miss an episode, subscribe via iTunes, Sticher, Spotify, or Google Play.

Leave us a review on iTunes.

Have a money question you want us to answer? Submit one here