Lifetime Bill of U.S. Taxpayers!

*The average American taxpayer pays $14,305 per year in taxes.

*That equates to the average American taxpayer paying a total of $524,825 in taxes throughout their lifetime.

               - That is a substantial amount at about 35% of all your lifetime earnings!

*The Four Types of Basic Tax Are:

               - Federal income tax

               - State income tax

               - Sales or Use tax

               - Property tax levy

*Your state may have a flat income tax rate (less for higher income earnings) or a graduated income tax rate (more for higher income earnings), so do your research!

*Some main factors that will affect your tax liability is: filing status (singe, married filing jointly, head of household, etc.), credits & deductions (Earned Income Credit, Self-employment deduction), & state & local tax variations such as income tax (flat/graduated?), sales & use tax, & property tax.  Understanding state & local tax is crucial to understanding your total tax liability!  (i.e. New Jersey taxpayers pay the most in lifetime taxes at about $987,119, while West Virgina taxpayers pay the least in lifetime taxes at about $358,427!)

*Individual tax liabilities can be almost as unique as a fingerprint, so it is advisable that you seek a tax professional!

*Estimated Tax Payments & Withholdings

               - Estimated tax & withholdings (W2) should be 20% - 30% of income

               -If you take an early withdrawal from a 401k/IRA/Pension then withhold an extra 10% for the early withdrawal penalty too.  (i.e. withhold at 30% - 40%)

               - It is professionally recommended to make your quarterly estimated tax payments once a month, just like a regular bill!

               - Use the IRS Tax Withholding Estimator to calculate your tax liability.

 *Professional Tip

          - No income tax states like Alaska, Texas, Florida, South Dakota, Neveda, New Hampshire, Tennessee, & Wyoming generally carry higher sales tax on consumer goods to offset the lack of income tax revenue for the state. 

Sincerely,

                   Ashley Thomas, Enrolled Agent, CEO