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Taxes that high in the USA ?!?

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borreman

Member
What is the name of your state (only U.S. law)? NV

Both my wife and I own a business. We are filing 2010 jointly.

Our total income for 2010 is $158,000.
Our taxable income is $129,000.

Our accountant just gave us a tax breakdown that looks like this:

Federal Taxes due: $24,700
Self Employement tax due: $22,400

Total due: $47,000!!!

My wife and I are in disbelief that we would have to pay so much in taxes. That comes to a 36% tax rate! We understand we can make contributions to an IRA or SEP plan, but really, this is the United States of America! We are not supposed to pay that much taxes! I would pay the same amount of taxes in Europe but at least enjoy the health and social benefits that comes with it!

Is my accountant completely off or is she forgetting to suggest me something?

Any suggestions/ideas appreciated.

Sincerely
 


Zigner

Senior Member, Non-Attorney
What is the name of your state (only U.S. law)? NV

Both my wife and I own a business. We are filing 2010 jointly.

Our total income for 2010 is $158,000.
Our taxable income is $129,000.

Our accountant just gave us a tax breakdown that looks like this:

Federal Taxes due: $24,700
Self Employement tax due: $22,400

Total due: $47,000!!!

My wife and I are in disbelief that we would have to pay so much in taxes. That comes to a 36% tax rate! We understand we can make contributions to an IRA or SEP plan, but really, this is the United States of America! We are not supposed to pay that much taxes! I would pay the same amount of taxes in Europe but at least enjoy the health and social benefits that comes with it!

Is my accountant completely off or is she forgetting to suggest me something?

Any suggestions/ideas appreciated.

Sincerely
Yours is not a legal question.

Want high taxes? Head on out to California! :eek:
 

ShyCat

Senior Member
Your effective tax rate for Federal income tax is only 19%. I'd hardly call that outrageous, but you're free to complain like most everyone else.

The 15.3% self-employment tax is the combined employee and employer share of FICA/Medicare. (If you had, instead, worked for someone else, you'd only have paid 7.65%.) Neither of those are affected by IRA or SEP contributions.

At least we don't pay VAT here. :)
 

LdiJ

Senior Member
What is the name of your state (only U.S. law)? NV

Both my wife and I own a business. We are filing 2010 jointly.

Our total income for 2010 is $158,000.
Our taxable income is $129,000.

Our accountant just gave us a tax breakdown that looks like this:

Federal Taxes due: $24,700
Self Employement tax due: $22,400

Total due: $47,000!!!

My wife and I are in disbelief that we would have to pay so much in taxes. That comes to a 36% tax rate! We understand we can make contributions to an IRA or SEP plan, but really, this is the United States of America! We are not supposed to pay that much taxes! I would pay the same amount of taxes in Europe but at least enjoy the health and social benefits that comes with it!

Is my accountant completely off or is she forgetting to suggest me something?

Any suggestions/ideas appreciated.

Sincerely
Self employment taxes are the equivalent of the employer's and employee's shares of social security and medicare taxes, and equal approx 15.4% of your gross.

All self employed persons must pay self employment tax.

Regular income taxes must also be paid on the income.

36% is not at all out of line for a self employed person.

Was the 158k your net business income (after expenses)?
 

borreman

Member
Yes, the 158K was the net income after all expenses deducted.

I agree 36% is not out of the line, but it is far from the 19% federal taxes too! My problem in all this is that I am paying a 15% for social security and medicare, but where and when do I reap the benefits of this?

I have worked in France in the past, and I was paying about the same rate of taxes, but my doctor's and hospital's bills were covered! Go figure...

Thanks for your input though.
 

Antigone*

Senior Member
Yes, the 158K was the net income after all expenses deducted.

I agree 36% is not out of the line, but it is far from the 19% federal taxes too! My problem in all this is that I am paying a 15% for social security and medicare, but where and when do I reap the benefits of this?

I have worked in France in the past, and I was paying about the same rate of taxes, but my doctor's and hospital's bills were covered! Go figure...

Thanks for your input though.
At retirement.

Wait, let me qualify that just a little bit: If there is any left.
 

davidmcbeth3

Senior Member
And the taxes that you still owe but are not being charged on is $229,000 per person. Thats how much debt we have ... so far .. it will just get to be more & more until its unsustainable & our gov't collapses.
 

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