What Does The Average American Pay In Income Taxes ?
One of the many important duties as a law abiding citizen is paying taxes on time. The amount paid in taxes may vary in accordance to the income generated by the individual in that year. On an average, the tax amount is equivalent to eighteen percent of the yearly income.
Depending upon the income, it may vary anywhere from fourteen percent to twenty-four percent of the total income. This is according to data collected during 2004, when the average taxpayer with an income of fifty-one thousand and one hundred dollars had to pay around nine thousand three hundred and seventy-seven dollars to the government.
In case the gross yearly income is below hundred thousand dollars annually, then the taxes range between seven to ten percent of their total earnings. This is just half of the amount paid in taxes if the earning is more than hundred thousand dollars. In the same manner, if the person earns around or more than two hundred thousand dollars he has to pay more than forty-five percent of his income in taxes. However, only a very small percent, approximately two percent, of the population falls in this income bracket.
There is a lot of levee for senior citizens who are sixty-five years and above. They do not have to pay taxes even if their income goes above the limit of non-taxpayers. Again, if the income comes from Social Security, then one does not have to pay anything in taxes.
To be considered as a non taxpayer, one has to earn less than eight thousand two hundred dollars annually. Mortgage paid for property is subtracted from the total amount paid in taxes. Thus it is worthwhile for the average American to buy a house rather than pay rent.
Investors and self employed individuals pay only what they wish to. Most of them do not show their actual total income. If your business is categorized as a standard C type, then one needs to pay only thirty percent of one’s profit. Again, most people do not pay the exact amount in taxes as the government is unable to check every single resident on their tax returns. However, taxes are less in America compared to Canada and Europe.
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