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Version du 2 septembre 2026 à 02:37
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Despite the actual tax rate reductions belonging to the Jobs and Growth Tax Relief Reconciliation Act of 2003, the top marginal income tax bracket for many retirees is often a whopping fouthy-six.3%. Why? Because Social Security benefits are subject to income tax. Those affected are Social Security recipients who have enough good fortune (misfortune?) to get subject to both the 25% taxes bracket and the 85% inclusion rate for Social Security benefits.
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For his 'payroll' tax as the employee he pays 7.65% of his $80,000 which is $6,120. His employer, though, must cash same 2.65% - another $6,120. So in between the employee amazing employer, the fed gets 15.3% of his $80,000 which comes to $12,240. Keep in mind that an employee costs an employer his income plus 7.65% more.
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