Reaching out across the Web .. ...分享 Zuojun Yu, physical oceanographer, freelance English editor


How much do you know about taxes in the US?

已有 1999 次阅读 2012-2-12 03:46 |个人分类:Education|系统分类:海外观察| tax, income, taxes, deduction

If you pay income taxes in the US, how much do you really know about taxes?

I knew something about income taxes since I have been filing my own for more than 20 years. But, I wish I knew more. (The more you know, the less you need to pay Uncle Sam, legally.)

"The current structure of tax brackets has rates that start at 10 percent of income at the low end and rise to 35 percent for the highest earners. In the middle are brackets of 15, 25, 28, and 33 percent. That top bracket doesn't mean the rich pay 35 percent of their adjusted gross income in taxes. Deductions and other factors lower their effective rate to 23 percent of income, the Tax Foundation reckons."


So, I thought as long as I am only paying 25% for my "top earning $," I am fine with it. By "top earning $," I mean the last $100 I make, in contrast to the first $100 I make.

When I used TurboTax for the first time last year, I realized something was wrong but I was too busy (working) to figure it out.

This is my second year of using TurboTax, so I played with it to find out how much taxes I was actually paying for my "top earning $" in 2011. I was quite surprised.

The rest is for freelancers, because it does not apply to your income from an institute. Yes, I am still only paying 25% federal income tax for my last $100. BUT, there are other taxes, such as state tax, which I knew, and self-employment tax, which I also knew. So, I was paying $34 in all the taxes for the last $100 I made by editing word by word for a total of 1,400 words.

What have I learned from playing with TurboTax? I WILL WORK LESS this year. The less I work, the less money I make, and the less taxes I need to pay. Uncle Sam, do you hear me clearly?

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