Tax reform is the topic of the day especially for those of us in the biz. As of this writing, November 2017, we have seen the first draft of the House legislation. What the final bill will look like (assuming there is a final bill) is still a question mark.
In the meantime you may be interested to learn where YOUR income and tax bill stacks up compared to everyone else in the United States.
Kiplinger has created a tax burden calculator that will tell you just that based on IRS data from 2015, the most recently available year.
Find it HERE.
It’s easy to use.
Enter your AGI (Adjusted Gross Income) in the box.
Your AGI is on Line 37 of the 1040 Form on your tax return.
That form is usually toward the top of the huge stack of paper (or .pdf) you got from your tax preparer.
If you can’t find your tax return (which pains me!) you can use your salary. But for people who earn most of their income from a job, your AGI is lower than your salary.
Let’s say your AGI is $80,000. Plug that in and you see this:
An Adjusted Gross Income of $80K puts you in the top 25% of earners.
The top 25% of earners reported 69.0% of all Adjusted Gross income and paid 86.6% of total federal income taxes.
The US income tax system is a “progressive” tax system, meaning those who earn more pay more.
What about the oft vilified 1%?
Put $485,000 AGI in the calculator and you see this:
The top 1% of earners reported 20.7% of all Adjusted Gross income and paid 39.0% of federal income taxes.
Have fun finding out where you stand. And stay tuned for more updates on sausage making, errr, I mean tax reform.