How much in taxes is taken out of my paycheck
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Why Do We Pay Taxes?
Paycheck Tax Deduction Estimate
In 1776, we declared our Independence from England because they were passing taxes on Americans without representation. We had no say so in the taxes that were passed and no say so in how the tax money was used. After the Revolutionary War, taxes were placed on things such as real estate sales, import and export tax, and the states would tax things such as liquor. In 1861, Congress passed a tax on personal income if you made more than $800 a year. The percentage of tax you paid was 3%. This was to help offset the cost of the Civil War. In 1872, the income tax was abolished and many other taxes repealed because the income was no longer needed. This lasted until 1913 and the passage of the 16th Amendment.
By 1913, 36 States had ratified the 16th Amendment to the Constitution. In October, Congress passed a new income tax law with rates beginning at 1 percent and rising to 7 percent for taxpayers with income in excess of $500,000. Less than 1 percent of the population paid income tax at the time. Form 1040 was introduced as the standard tax reporting form and, though changed in many ways over the years, remains in use today.
For more details on the history of taxes in America, visit the U.S. Treasury Fact Website.
Percentage Taken Out For Taxes On Paycheck?
The percentage taken out for taxes on paycheck varies from state to state and year to year. To determine your state income tax in 2008, you can visit this link.
The Federal Government actually levies three taxes on you. One is for FICA or Social Security Tax - this amount is currently 6.2% of your income. One is for Medicare - this amount is currently 1.45% of your income. Below are charts that will give you an idea of your straight federal income tax for the 2008/2009 year.US Tax Schedule 2008/2009 and Rates for Single Filing Status
- 10% on income between $0 and $8,025
- 15% on the income between $8,025 and $32,550; plus $802.50
- 25% on the income between $32,550 and $78,850; plus $4,481.25
- 28% on the income between $78,850 and $164,550; plus $16,056.25
- 33% on the income between $164,550 and $357,700; plus $40,052.25
- 35% on the income over $357,700; plus $103,791.75
- 10% on the income between $0 and $16,050
- 15% on the income between $16,050 and $65,100; plus $1,605.00
- 25% on the income between $65,100 and $131,450; plus $8,962.50
- 28% on the income between $131,450 and $200,300; plus $25,550.00
- 33% on the income between $200,300 and $357,700; plus $44,828.00
- 35% on the income over $357,700; plus $96,770.00
Category: Personal Finance