Quote:
Originally Posted by Flames Fan, Ph.D.
Just to add some more detail to Vlad's response:
- Taxes are indeed progressive in the US, both at the Federal and State levels.
- Social security is a flat ~6% tax on the first ~100K of gross salary (going off the top of my head).
- Medicare is about 1.5% with no limit on the gross salary that is taxable.
Ways to reduce Federal taxable income:
- mortgage interest
- contribute to a 401K or 403b... annual limit is currently 16500.
- contribute to a traditional IRA (Roth IRA takes after tax income)
- if you make enough money and are an "officer" at a corporation, you may also qualify for the 457 plan. This allows another 16500 to be deposited as deferred compensation and is contingent on the solvency of the business.
- procreate
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There is also flexible spending accounts for (many medical/daycare) expenses which are pretax.
Also, phd, it is progressive at the state level assuming there is a state income tax which WA, FL, TX, NV to name a few off the top of my head don't. WA has a regressive system which is mostly dependent on sales tax.
And of course, those states' citizens successfully lobbied to have sales tax be included as a federal deduction because it wasn't fair that states with income tax were able to deduct.
Sublime...