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The percent of your income that is paid in federal personal tax depends in great part on how much you make and how many deductions you have. Everyone, even the self-employed, are required to pay Social Security and Medicare taxes (called FICA and SECA). When you work for someone else, your employer pays half of the Social Security and Medicare tax and half is deducted from your gross pay. Self employed individuals are required to pay the full amount, which is 12.4% for Social Security and 2.9% for Medicare.
Beyond FICA and SECA, the amount of income tax you pay can range from 0% to approximately 35% of your income. Things like earned income credits and itemized deductions reduce the amount of income on which you have to pay taxes. If you own a home, you can often deduct the cost of the interest and property taxes you pay. If you or one of your dependent children attend college, you can deduct a portion of the tuition and other education expenses from your income. Families with children who make under a specific amount receive tax credits for the dependent children in their homes.
To make sure you are taking advantage of all of the tax deductions and credits possible, be sure to visit the IRS website or contact a tax advisor.
Beyond FICA and SECA, the amount of income tax you pay can range from 0% to approximately 35% of your income. Things like earned income credits and itemized deductions reduce the amount of income on which you have to pay taxes. If you own a home, you can often deduct the cost of the interest and property taxes you pay. If you or one of your dependent children attend college, you can deduct a portion of the tuition and other education expenses from your income. Families with children who make under a specific amount receive tax credits for the dependent children in their homes.
To make sure you are taking advantage of all of the tax deductions and credits possible, be sure to visit the IRS website or contact a tax advisor.
