What percentage of your income did you pay in taxes this year?

[jenmcadams]

so you have to pay the taxes that a company usually pays on behalf of the employee as well?

For contractors, that's a big piece of it....normally you as an employee pay 7.5% payroll tax for FICA, SS, etc. and your employer pays the other 7.5%. So there's that piece and then there's the issue of paying it quarterly (doesn't change the amount, but does add complications).

My DH owns a business, but it's a C-corp with institutional investors and he really only owns about 30% of it...the company obviously deals with tax issues (although they're not profitable yet, so not much tax to be paid), but in addition to being an owner, he's a paid employee and that's just like being an employee anywhere.

[pb&j]

Self-employed with his own business? Or self-employed as a contractor but not incorporated? Just curious. I've only ever worked for a paycheck from a company so I don't know who self-employed works.

I know a bunch of people with "businesses" that are truly just tax write-offs not really intended to make money, so I know in many ways there are incentive for entrepreneurship. But obviously that is very different from someone who pays a huge portion of take-home pay in taxes.

Self employed with his own business, an LLC. He is sole proprietor, but has a few independent contractors that he hires.

If you have a real income, and you have a "hobby" business, you can write off the losses of that business up to the amount that you took in from the business.

But for small businesspeople just trying to make a living, when it is their own source of income, taxes can be very steep. For one, the self-employed have to pay 15.3% in social security, while those of us with "real" jobs pay half that. For another, in the state we live in, we pay higher personal property taxes on his car since he uses it for business purposes. Also, he has to pay quarterly estimated taxes, and if he underestimates, guess what? We owe interest and penalties at the end of the year. We're not getting rich, just trying to support our family and get by. DH works 7 days/wk, many more hours per week than I do.

We have an accountant - it's a must. There's no way we could do our taxes ourselves.

[egoldber]

But for small businesspeople just trying to make a living, when it is their own source of income, taxes can be very steep. For one, the self-employed have to pay 15.3% in social security, while those of us with "real" jobs pay half that. For another, in the state we live in, we pay higher personal property taxes on his car since he uses it for business purposes. Also, he has to pay quarterly estimated taxes, and if he underestimates, guess what? We owe interest and penalties at the end of the year. We're not getting rich, just trying to support our family and get by. DH works 7 days/wk, many more hours per week than I do.

We have an accountant - it's a must. There's no way we could do our taxes ourselves.

Again

DH's consultant business is an LLC and he is the sole proprieter. He makes twice as much as I do at my government job, but the tax rate is steep. And then the complication of me also having a job and him "paying himself" salary from the LLC and it's We've definitely moved beyond TurboTax this year.

[o_mom]

Self-employed aside, for those in the 30%+ is is mainly property taxes/AMT that push it up?

The other thought is how many are two income families? Would that make a difference in the SS tax burden?

[pb&j]

Again

DH's consultant business is an LLC and he is the sole proprieter. He makes twice as much as I do at my government job, but the tax rate is steep. And then the complication of me also having a job and him "paying himself" salary from the LLC and it's We've definitely moved beyond TurboTax this year.

I give DH a really hard time at tax time every year. About two weeks after my W-2 shows up, I tell him if it weren't for his stupid job, I'd have my refund back already. Because of him, we don't file until April 15, and we are always paying taxes. But then I tell him I love him anyway.

[lmwbasye]

Well, we don't pay state taxes (TX) and we got paid for federal (DH is military and was deployed so most of his pay wasn't taxed....plus, we were withholding at a higher rate). We could count the property taxes, BUT we didn't pay that technically since the renters in our house that we own pay for that in rent.

So, technically 0%. If you add in property taxes then less than 1%.

[jayali]

Well over 30% here if you add in ss, medicare and property taxes. i just looked at turbotax and just about wanted to vomit.

[Fairy]

Wait, WITH deductions or without? I just voted, but I included the final tax bracket with the deductions, so it's going to skew things. Sorry.

[vonfirmath]

Well, we don't pay state taxes (TX) and we got paid for federal (DH is military and was deployed so most of his pay wasn't taxed....plus, we were withholding at a higher rate). We could count the property taxes, BUT we didn't pay that technically since the renters in our house that we own pay for that in rent.

So, technically 0%. If you add in property taxes then less than 1%.

Did you get more money back than you owed? Or did you just withhold at a higher rate and owe fewer taxes than you paid so you got some of your money back?

The amount you owe in Federal taxes is different than the amount you pay/get refunded to you at the end of the form.

Also, does military pay SS/Medicare?

I owe very close to 0 Federal Income tax at the end of the year (don't make much, have 1 kid). But SS and Medicare together takes nearly a 10% bite out of my paycheck.

Live in Texas so no Income taxes, but I DO pay sales tax (and frankly, leaving the sales tax out but allowing income tax to be counted does mess up the calculation here because the sales tax tends to be higher in states without income taxes.) And property taxes swing our tax payment up over 10% of income. This is without owing ANY money to the federal government. (Less than $100 over a year last year)

[o_mom]

Wait, WITH deductions or without? I just voted, but I included the final tax bracket with the deductions, so it's going to skew things. Sorry.

I think we were going without - not the AGI, or even the Box 1 wages, but the Medicare/SS wages (box 5?) which is the true gross before paying out medical insurance, 401(k) etc.

We are not low income and DH had a large bonus last year so it was higher than normal, but even if I split the income between the two of us (which would increase our SS) and multiplied our property tax by five I'm barely getting close to 30%.