January Summary – $5188 Paid

Well, the first month of the year is over. Amazing!

In the first month, we paid $5188 in taxes out of $16,469 in income. There was another $120 of interest income, but it was untaxed. This is a 31.5% effective tax rate. I suppose it would be slightly higher if I counted the employer side of social security and medicare. On the other hand, it might be slightly lower if I counted the untaxed employer contribution toward my retirement and health-care benefits as income. There are many ways to count this stuff, and I’d welcome any thoughts on how I should be counting this.

We have classified our taxes into various categories, including (1) federal, (2) state, (3) local (e.g., municipal franchise fees for cable TV and cell phone taxes), (4) sales, and (5) gasoline (federal and state). Out of the taxes paid, sales tax accounted for a measly 3.5%. Federal was the big winner with 72.0% of taxes going to “them.” The state took 23.1% of the pie. The other categories sucked up the balance.

See you in February!

Taxes Filed for 2009

To prove my point about how I do not expect 2010 taxes filed in 2011 to impact this study much, I present our results from tax year 2009. Federal taxes were overpaid to the tune of $900. State taxes were underpaid by about $600. So, it was only about a $300 overpayment. Next year it might be closer to a $1000 overpayment, since CA is taking more out of our paychecks all year long.