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Where Do You Rank as a Taxpayer?

Do you know how you compare with your fellow taxpayers when it comes to the income you make and the taxes you pay? We have the answer.

Where Do You Rank as a Taxpayer?
Emmanuel Dunand, AFP/Getty Images
By Kevin McCormally

As we move toward the election this fall, the already heated debate about income inequality -- the growing disparity between rich and poor in America -- will become even hotter. And, the ongoing battle to rein in the national debt will inevitably focus on ways to extract more tax from some taxpayers.

As Congress grapples with these issues and partisans on every side present "facts" to justify their proposals, we think it's important for you to know where you fit in. Does your income put you in that at-once extolled and excoriated 1 percent of richest Americans? In the bottom 50 percent? Somewhere in between?

SEE OUR TOOL: Calculate Your Tax Share

And, no matter where you fall, are you bearing your "fair share" of the nation's tax burden? Do you have a clue what portion you pay now ... beyond a gnawing feeling that it's too darn much?

To help answer such questions, we created a tool to show how the nation's taxable income and the country's federal income tax bill are distributed among its citizens. Are the wealthy coddled with tax favors? Is the middle class unfairly burdened? Our tool uses the latest data to shine a bright light into what are too often murky shadows. We'll also show you how your own income stacks up with that of your fellow Americans.

Are you ready to see where you fit in? With our simple calculator, enter a single number from your latest tax return and you'll instantly know the answer.

What the Numbers Show

The latest numbers from the IRS -- based on just released data from 2011 tax returns -- show what it takes to be among the top 1 percent of income earners: adjusted gross income of $388,905 or more. That's 5.2 percent higher than it took to buy into this rarified status a year earlier. The 1.37 million Americans with this elite status reported 18.7 percent of all the country's taxable income.

That's right.
One percent of taxpayers reported almost 19 percent of all taxable income. And that same tiny group kicked in 35 percent of all the taxes paid. (A year earlier, the top 1 percent of earners kicked in 37 percent of all taxes paid.) How much do you need to make to be in the top 50 percent of earners? Just $34,823.

Fall below that level and you are in the bottom half, along with about 68 million of your fellow taxpayers. All told, that group earned just 11.5 percent of the AGI reported on 2011 federal returns. And they paid 2.89 percent of all the income taxes paid.

Use our calculator to see if you're in the top 1 percent, 5 percent, 10 percent, 25 percent, 50 percent ... or bottom 50 percent of income earners.

Our income and tax-burden breakdowns come from information reported on 2011 individual income tax returns. Income categories are based on adjusted gross income.

(Note that these figures include only federal income taxes. According to one study, more than half of all wage earners pay more in Social Security and Medicare taxes than they do income tax. The percentage of those paying more payroll tax than income tax soars to nearly 90 percent if you count both the employer and employee share of those levies.)

For historical perspective, back in 1986, the top 1 percent of earners reported 11 percent of all income and paid 26 percent of the income taxes; the lower-earning 50 percent made 17 percent of the income and paid 6 percent of the nation's individual income tax bill.

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Cities with the Lowest Tax Rates

The total amount of tax you pay reaches far beyond what you owe the federal government. Depending on where you live, most likely you're required to pay additional taxes, including property and sales tax. The disparity between the amount of tax you pay in a low-tax city and that in a high-tax city can be dramatic. Living in any of these 10 cities could save you a bundle, although the exact amount may fluctuate based on your income and lifestyle choices.

Cities with the Highest Tax Rates

Much ado is made in the press about federal tax brackets, but cities can carry a tax bite of their own. Even if you live in a state that has no income tax, your city may levy a variety of taxes that could eat away the entire benefit of living in an income tax-free state, including property taxes, sales taxes and auto taxes. Consider all the costs before you move to one of these cities, and understand that rates may change based on your family's income level.

Great Ways to Get Charitable Tax Deductions

Generally, when you give money to a charity, you can use the amount of that donation as a deduction on your tax return. However, not all charities qualify as tax-deductible organizations. While there are many types of charities, they must all meet certain criteria to be classified by the IRS as tax-deductible organizations. There are legitimate tax-deductible organizations in many popular categories, such as those listed below.

A Freelancer's Guide to Taxes

Freelancing certainly has its benefits, but it can result in a few complications come tax time. The Internal Revenue Service considers freelancers to be self-employed, so if you earn income as a freelancer you must file your taxes as a business owner. While you can take additional deductions if you are self-employed, you'll also face additional taxes in the form of the self-employment tax. Here are things to consider as a freelancer when filing your taxes.

Tax Deductions for Voluntary Interest Payments on Student Loans

Most taxpayers who pay interest on student loans can take a tax deduction for the expense ? and you can do this regardless of whether you itemize tax deductions on your return. The rules for claiming the deduction are the same whether the interest payments were required or voluntary.

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Where do i rank as a taxpayer ??? After working from age 12 to 65 and retireing from a major company I worked at for 35 years, I find I and others are struggling. Homes, food, gasoline, electricity, healthcare and taxes have skyrocketed. Jobs are extremely hard to find for old and young alike and the possibility of a brighter future is NOT looking good. Obama has been a failure. Too many failed policies that have wasted the American taxpayer's money. Obama has no idea of running a business or the costs of running a household. For a person who has been handed things all his life and continues to live the life of luxury, I don't see America recovering. We need a leader that can get the economy going and improve the lives of Americans and curtail wasteful spending and welfare abuse. 2016 cannot get here soon enough for me.

April 06 2014 at 7:15 PM Report abuse +1 rate up rate down Reply

Generally; the US economy will tend to head up;
this is true even if a Commodore-64 was sitting in the Oval Office's President's Chair for the last six
( 6 ) years !
However one expects a President to do better than this........
Obama has created no jobs in the 6 years and in fact; hasn't had idea one ( 1 ) about jobs in thiose 6 years !

April 06 2014 at 1:45 PM Report abuse rate up rate down Reply

Skipping over why we aren't more competitive in the world economy and why we aren't able to create good paying jobs is a bogus conversation. Until those issues are addressed the process of increasing taxes on anyone is just government tring to convince you more taxes is the answer. I can guarantee the government will always spend it faster than you can afford to pay the taxes unless you force them to live within a set percent of GDP. If they want more revenue then it's up to them to come up with a system that allows us to be competitive while generating the tax revenue they wish to spend. Come on folks, let's insist on changing the narative and make a real change that works for everyone. Envie is a disease government spreads to distract you from the truth.

April 06 2014 at 7:38 AM Report abuse +2 rate up rate down Reply

Obama has created no jobs for the bottom 50% in Six ( 6 ) Years.
The top 50%'s jobs somehow survived Clinton's Eight ( 8 ) Years and Obama's Six ( 6 ) Years;
But if they lose their jobs in Obama's next Two ( 2 ) Years;
Then the Crash will Occur !

January 29 2014 at 10:05 PM Report abuse -2 rate up rate down Reply
1 reply to YourFtr's comment

typical repub no facts just bla bla bla
every chart proves you wrong

April 06 2014 at 8:16 AM Report abuse -1 rate up rate down Reply

very misleading presentation

January 26 2014 at 1:54 AM Report abuse -2 rate up rate down Reply

what if congress scrapped the 73,000 pages of tax code
and everyone just paid a small national sales tax with no deductions for anyone for anything?
they would probably collect more, everyone would pay some, the rich would pay more, we could close down the IRS, congress would have a lot less power, and April 15 would just be another spring day.

January 25 2014 at 8:32 AM Report abuse +4 rate up rate down Reply
1 reply to scottee's comment

Actually the poor would be likely pay more, even in such a scenario. The rich might actually pay less. I certainly don't spend much more than someone with a tenth my income.

April 06 2014 at 9:34 AM Report abuse -1 rate up rate down Reply

My solution is to retire earlier than planned and move down a notch or two on the chart. It is just not worth working and then giving so much back to the gov.

January 24 2014 at 5:27 PM Report abuse +2 rate up rate down Reply

The simple fact of the matter is that the debate over what tax rate the most affluent should pay is no longer a debate over what is "equitable". We are now talking about how much the rich "can" pay to help support the system in something resembling its current form. Not because it is "equitable", but because they are the only ones that can really pay anything meaningful at this point and, whether fair or not, almost 70% of americans take out more from the current system than they put in in taxes, adn these people are NEVER going to vote to change the status quo. **** At least not until the Fed deflates the dollar's value to "Weimer Republic" status.

January 24 2014 at 4:19 PM Report abuse rate up rate down Reply

The Tax Policy Center, run by the Urban Institute and the Brookings Institution, recently studied payroll and income taxes paid by each income group. The richest 1 percent pay 27.5 percent of the combined burden, the top 20 percent pay 72 percent, and the bottom 20 percent pay just 0.4 percent. One reason that the disparity in tax shares is so large is that Americans in the bottom quintile who have jobs get reimbursed for some or all of their 15 percent payroll tax through the earned-income tax credit (EITC).

January 24 2014 at 4:12 PM Report abuse rate up rate down Reply

*the $50,000 to less than $75,000 tier generated 5.1% of all taxable income, and paid 9% of all taxes, at an average tax rate of 10.8%)
*the $75.000 to less than $100,000 tier generated 5.7% of all taxable income, and paid 9.3% of all taxes, at an average tax rate of 12.0%)
*the $500,000 to less than $1,000,000 tier earned 5.8% of all taxable income, and paid 9.3% of all taxes, at an average tax rate of 28.7%)

January 24 2014 at 4:08 PM Report abuse -2 rate up rate down Reply
1 reply to obamasam0r0nl's comment

you are the moron

April 06 2014 at 8:18 AM Report abuse rate up rate down Reply