How Much Tax You Pay for a Family of 3 With $50,000 Income
Tax flavour is merely around the corner, and as 2017 draws to a close, it'southward of import to start thinking about your taxes. To figure out whether you should expect a sizable refund or will owe coin to the IRS, the first step is getting a handle on how much income tax you'll likely have to pay.
Too many factors to count play into the precise amount of tax yous'll pay, but you can notwithstanding get a good idea from looking at some of the most typical situations that Americans face at tax time. To help you practise that, hither are two typical situations involving households that each make roughly the median income of $50,000.
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Scenario ane: Single and starting out
Two factors arguably play the largest role in what your tax liability volition be: your filing status and the number of family members you accept in your household. In full general, the smaller your household is, the more revenue enhancement y'all'll pay for a given income figure.
Equally an instance, take a single person making $50,000 per year. Nosotros'll presume that this person has no children or other dependents and has insufficient itemized deductions to justify not taking the standard deduction. To keep things simple, we'll also assume that all of this person's income comes from a regular job with an employer.
In this example, gross income of $50,000 volition be reduced by a standard deduction of $vi,350 and a single personal exemption of $iv,050. That makes taxable income equal to $39,600. That'southward just barely enough to push the taxpayer into the 25% revenue enhancement bracket, and the tax will be $5,638.50. Detect that even though the marginal revenue enhancement charge per unit is 25%, the effective revenue enhancement rate over the entire $fifty,000 in income is only over 11%.
Scenario 2: Married with children
To see just how different a tax situation can be, have a similar example but with a much different family construction. Instead of a single person, say that you lot have a married couple with two children with full household income of $50,000. In order to make comparisons simpler, we'll go on the rest of the assumptions the same: taking the standard deduction with all income coming from regular job pay.
In this situation, y'all first with the same $50,000 in gross income, but the standard deduction is twice every bit much at $12,700. Ii spouses and two children add up to four personal exemptions, which at $iv,050 each reduces your taxable income past $16,200. That yields only $21,100 in taxable income. Under the married articulation filer rate structure, that puts yous barely into the fifteen% bracket, and the initial tax calculation yields merely $2,232.fifty in taxes.
Yet that'south just the start. Assuming that the two children qualify for the child tax credit, this family can reduce their taxation burden by another $2,000. That brings the full tax beak down to just $232.50, and the effective tax rate on their $50,000 income is less than 0.5%.
General conclusions about taxes for typical American taxpayers
These ii examples won't fit your state of affairs perfectly, simply they illustrate some basic rules that govern taxes for those with incomes of virtually this size. Married couples get larger standard deductions, and families with children get added personal exemptions and other benefits like child tax credits. The tax brackets that cover joint filers impose much lower taxes than the brackets for single filers. In about cases, yet, those making $50,000 will pay but a small pct of their overall income in taxes.
Obviously, other factors tin also apply. The more of your $50,000 comes from tax-favored investment income like long-term capital letter gains or dividend income, the lower your taxes will exist, because the tax rates on those types of income are lower. Some taxpayers volition as well qualify for credits and deductions other than those listed here.
For the most office, households with incomes of around $50,000 can look to pay constructive tax rates of around x% or less. That'southward good news for those who have to count every dollar in order to make ends meet, and it's important to accept advantage of key revenue enhancement provisions designed to brand the tax organisation as kind equally possible to typical Americans and their families.
Source: https://www.fool.com/taxes/2017/12/06/how-much-income-tax-will-i-pay-if-i-make-50000.aspx
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