Tuesday, April 17, 2012

My effective tax rate is 23.3%

Since this seems to be all the rage (figuratively and literally!), I'll disclose that my own effective tax rate is 23.3%, for 2011. But, being self-employed, that includes full FICA, while an employee would not include the employer's share of FICA. Subtracting half of my FICA, would give an effective tax rate of 17.3%. My total income would put me roughly at the bottom of the top quintile (20% make more than me, but I make more than 80% of the households out there.) I am single and without dependents or significant charitable contributions, and a small amount of dividend income, a lot of which is tax-free in ROTH retirement accounts.

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