I found this really helpful calculator on Smart Asset to figure out your expenses and offsets to your income tax. If you try to understand where your money goes and how contributing to retirement can offset taxes this might be for you.
Smart Asset also has a really good breakdown of the rules that govern taxes. What they mean as most terms are not exactly friendly to the average Joe. From what I can see, it allows you to make an assessment for real life situations like: If your boss wants to give you a raise this year how would that affect you? Maybe you should wait until next year as it could put you into another tax bracket.
Using the Tax Calculator I created an example household with the income of $100K. You can see how much is paid in taxes with zero adjustments for 401K and other deductions. It is scary to see how much and how high taxes actually are.
Then:
- Add in your health care costs
- Add in (NC taxes) 7% sales tax on average (similar to VAT in Europe)
- Home property taxes ($1300 to $3500 on average in Forsyth county).
- Auto taxes – based on value so that adjust annually (don’t forget inspection)
- Other hidden taxes (Fuel taxes in NC were roughly .45 cents per gallon
You now can start to see and understand what is left, for you and yours. It really is a little disturbing. I am all for paying taxes and my fair share as Jesus said In Mark 12: “Give to Caesar what is Caesar’s, and to God what is God’s.”. If God asks for 10% (hello the creator of the universe) to be given to your Church – what makes it OK for man and politicians to take more than that? Why is it OK? You should ask these questions and discuss with your friends, neighbors and politicians. Once you total these numbers up for a household income of $100K would pay roughly + or – 44% of taxes. I don’t know about you, we don’t get 44% of services rendered.
| Tax Type | Marginal Tax Rate | Effective Tax Rate | Tax Amount |
| Federal | 25.00% | 18.05% | $18,047 |
| FICA | 7.65% | 7.65% | $7,650 |
| State | 5.75% | 5.31% | $5,310 |
| Local | 0.00% | 0.00% | $0 |
| Total Income Taxes | $31,008 | ||
| Income After Taxes | $68,992 |
Back to the calculator – select the ADVANCED mode, you can start to plug in your contributions and deductions. A real helpful tool for you to see and understand how much taxes your are paying and how 401(k) Contribution, IRA Contribution, Itemized Deductions Number of Personal Exemptions will affect the overall amount of cash going back to the Government and keeping it in your pocket.
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Here is the link to the income tax calculator
They also have other calculators and other information that includes:
- Mortgage &Refinance
The affordability tool will help you determine exactly how much house you can afford using real mortgages. - Rent vs Buy
The rent vs buy calculator will help you determine whether it makes more sense for you to buy or rent a home using real time data. - Credit Cards
Add your credit card debt details to calculate the total interest and time it will take for you to pay off your debt.
- Compare Credit Card Offers
A credit card comparison tool to compare today’s featured cards and find one that’s right for you. - Retirement Calculator
Guesstimate what you will need… 401K, Social Security and more – good news is we actually might be ok (if the market does not tank or something like that)! - Banking
Validate checking, saving accounts and CD rates (offers, account offers etc). - Property taxes
Here will make you a little angry if you live in the city- in NC we pay way to high of taxes at every turn.
These tools can help you to answer many questions:
- What does my portfolio look like today for retirement?
- Can I contribute to my savings via an IRA, 401K etc. to reduce what is paid in taxes and contribute to my retirement accounts.
- I like our current home – however what could I actually afford based on current income?
- We use the Chase Amazon card for cash back into our Amazon account (Amazon rewards program) – however finding a card that could give us additional cash back could be interesting.
Many other questions run through my head… but this is some of them. I honestly don’t know how in the world have I not ran across this site before! Keep this blog post and or add the web site to your favorites in your browser. I hope you find this information informative and helpful I know I have!
Your Income Taxes Tax Type Marginal Tax Rate Effective Tax Rate Total Income Taxes
Source: Free Income Tax Calculator – Estimate Your Taxes | SmartAsset
Joe Salling
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