How much will I pay in income taxes if I make $ 100,000?


Nobody likes to pay income tax, but almost everyone pays at least some IRS. Even if you receive a refund, it is simply because the money you have usually taken out of your paycheck has to go towards your tax bill.

Whether you are planning some advance tax or are getting ready to start preparing for your tax return, it is helpful to get a sense of what your tax bill is going to look like. For families earning $ 100,000, tax bills can vary dramatically. Below, we will walk through some common scenarios and how they will apply to the tax returns of 2020 to be held in April 2019. Even if your situation does not match with one of them, they should give you a sense of what to expect on your last tax return.

A single person who has no children can pay income tax.

First, let’s look at a person who makes $ 100,000 and who has no children or other dependents. People can fall into this category at many different stages of life, whether it is a young worker in a high-income profession who has not yet started a family, a divorced person who either has no children or Dependents whose former husband claims as children, or drawing taxable distributions from a retired 401 (k) plan accounts or traditional IRA.

The biggest variable with income tax is whether you claim the standard deduction or itemize your deduction. However, most people take the standard deduction, so we will assume for these calculations what this taxpayer does. We would also speculate that any investments are placed in tax-friendly accounts that do not have immediate tax consequences.

In this situation, a standard deduction of $ 12,400 would reduce gross income by $ 100,000. That excludes taxable income of $ 87,600. The tax on that income is $ 15,103.50. Assuming that you are not eligible for any tax credit or other deductions, this tax bill will require you to pay it through a combination of payment of income tax, quarterly estimated payment and final payment with your tax return.

What can a married couple with two young children have to pay in income tax?

Next, let’s take a look at a married couple with two children, whose combined household income is $ 100,000. For these purposes, it does not matter whether the two spouses work or how the income is divided between them. We will again assume that the standard deduction applies and that all taxable income comes from sources that will be taxed at ordinary income rates.

For this family, the standard deduction is $ 24,800, twice what the single standard deduction is. This brings gross income from $ 100,000 down to $ 75,200 in taxable income. In addition, tax brackets are more favorable for married couples who file jointly. The tax calculated is $ 10,892.

However, in this case, you will not stop here. It is likely that both children will qualify for the child tax credit, which reduces to $ 2,000 per child and taxes. This brings the final tax to $ 6,892.

Item

Single, no dependent

Married jointly, two children

Gross revenue

$ 100,000

$ 100,000

Standard deduction

($ 12,400)

($ 24,800)

tax income

$ 87,600

$ 75,200

Tentative tax

$ 15,104

$ 10,892

tax credits

$ 0

$ 4000

Net tax is due

$ 15,104

$ 6892

Calculation by author based on IRS rules.

Other factors to consider

These examples were very simple, but your situation may be more complicated. Here are some things to keep in mind as you drive through your tax:

  • If you have more than the itemized deduction, the standard deduction will give you, then itemizing will reduce your tax bill more than the standard deduction.
  • These examples assumed that you are not eligible for any other deductions or credits. However, there are many ways to reduce your taxable income or your total tax arrears. Traditional IRA contributions, for example, allow you to reduce your income to the annual income limit. Credits and saver credits such as Earned Income Credit, American Opportunity and Lifetime Learning Education Credit can cut your tax bill.
  • Your family situation also has an impact on your taxes. Many single people with children qualify for the head of household status, which for most single filers brings less tax than tax brackets. Likewise, if your spouse has recently died, you are allowed to continue claiming joint filing status for the period following the spouse’s death.
  • Certain types of income are eligible for favorable tax rates. Qualifying dividend income and long-term capital gains are taxed at lower rates than ordinary income. Depending on your income mix, your taxes may be different.

Despite those specific considerations, however, you can see that specific people pay $ 100,000, which is about 5% to 15% of their income to the IRS in taxes, with single filers making a huge impact. Huh. If you want to pay, you will need a smart tax break to cut your bill to Uncle Sam.

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