How much goes to the government?

Question

If you make $40,000 a year, how much of this goes to the government for income taxes? I mean this being for a person that has no children (for the child tax credit), is single, and lives alone. My friend told me that the government get's half of this, which means you only really have $20,000 which can't be right. I know the point is to screw people, but I don't even think the government would go that low. Any help would be greatly appreciated.

I didn't mean to sound like a "government hater". Im just saying that there should be a better way to handle things than to *** rape people who make peanuts.

Answer 1

When people like your friend throw out the 50% figure, they usually are making a rough estimate of your annual income that goes to all taxes, not just income tax.

Federal income tax varies with each individual's situation, but if you don't itemize, the federal tax on $40,000 would roughly be $4,500. There are also social security taxes of $3,000. If your state has an income tax, that could be another $1000 to $3000.

In addition to the $3000 of social security taxes (FICA & Medicare) withheld from your pay, your employer matches that dollar for dollar and has to pay $3000.

If you own a house, you pay real estate taxes. This could easily be $1000 or more. I have middle class clients who pay $12 to $15 thousand in property taxes each year on their main home. If you rent, part of the rent you pay goes toward those property taxes.

You pay sales tax on most things you buy.

Then there are all those taxes you don't see. The taxes businesses pay and have to recoup by charging you higher prices. Excise taxes (like the gas tax) that are added to the price of items. Once all these various taxes are added up, it could easily come to 50% of your income.

Answer 2

A single person with no dependents and no deductions or adjustments beyond the standard deductionl, earning $40,000 as an employee, would pay $3060 for social security and medicare, and $4451 federal income tax, for a total of $7511, or a little under 19% of $40,000. Depending on where they live, there might also be state and/or local income taxes, but in any case the total would be WELL under the 50% your misinformed friend told you. So chill out, and quit getting mad at the government for things that aren't even true.

Answer 3

Whoever told you that is CLUELESS! My gross income last year was right around $125k and my tax bill was just over $20k. That works out to be 16.4% give or take a fractional %. Add FICA and it's still right around $25k total. (Not all of it was subject to FICA if you're checking my numbers, there were some significant capital gains.)

Someone making $40k will be in a lower tax bracket than I am and will pay proportionally less -- probably less than $8- 10k total if all of it is subject to FICA. Depending upon your filing status and exemptions it could be a LOT less, that's a worst case number.

Answer 4

BD in NM appears to be correct for the amount that you pay DIRECTLY to the Federal government in income tax. The actual number is higher than that. Income tax paid by stores is included in the price you pay for their products. Every time you buy food, you are paying part of the grocery stores income tax. The same is true for everything you buy. Companies DON'T pay taxes, their customers do.

Answer 5

Assuming no special exemptions or deductions are used you would pay in approximately $5,027.00 or 13% of your annual income.

This is to the Federal government only. Your state would want it's cut also.

If you have a better way to pay for the services the government provides the folks in Washington DC would be glad to hear from you.

Answer 6

you should fall in about the 25% tax bracket. But alot more than that goes to the government. Remember property taxes, sales tax, gas tax. I would say they get about 99.999999999999999999999999999999999999999999999999999999999999999999999%