How much income tax does the average American pay the IRS? (2024)

FAQs

How much federal income tax does the average American pay? ›

The average income tax rate in 2021 was 14.9 percent. The top 1 percent of taxpayers paid a 25.9 percent average rate, nearly eight times higher than the 3.3 percent average rate paid by the bottom half of taxpayers.

The average cost to have a tax professional prepare an individual federal tax return in 2023 was $248, an increase of more than 16% from 2021, according to a survey by the National Association of Tax Professionals.

The U.S. currently has seven federal income tax brackets, with rates of 10%, 12%, 22%, 24%, 32%, 35% and 37%. If you're one of the lucky few to earn enough to fall into the 37% bracket, that doesn't mean that the entirety of your taxable income will be subject to a 37% tax. Instead, 37% is your top marginal tax rate.

How much will Americans pay in taxes over their lifetime? A recent study by Self. inc, a website that helps people build credit and savings, shows the average American will pay $524,625 in taxes throughout their lifetime, about one-third (34.7%) of their estimated lifetime earnings of $1,494,986.

Although most Americans believe the middle class bears the heaviest tax burden, it's actually the top 1% who pay the highest federal tax rate, at 25.9%, the Tax Foundation analysis found.

According to the U.S. Bureau of Labor, the average U.S. annual salary in Q4 of 2023 was $59,384. This is up 5.4% from the same time period in 2022 when the average American was making $56,316 per year. Average weekly earnings reached $1,142, while the average American made $4,949 per month in Q4 of 2023.

As of Jun 4, 2024, the average annual pay for an After Tax in the United States is $58,389 a year. Just in case you need a simple salary calculator, that works out to be approximately $28.07 an hour.

In total, about 59.9 percent of U.S. households paid income tax in 2022. The remaining 40.1 percent of households paid no individual income tax. In that same year, about 47.1 percent of U.S. households with an income between 40,000 and 50,000 U.S. dollars paid no individual income taxes.

California's tax system is relatively flat overall, whereas most states have highly regressive taxes that ask less of the rich than of anyone else. California's choice to have a less regressive system largely explains why California collects more tax revenue per capita than other states without especially high tax ...

The long-troubled West African country, Ivory Coast, has the highest income tax rate in the world. People living there are giving away a whopping 60% of their income to the government.

Is the USA a high tax country? ›

The United States ranked 31st¹ out of 38 OECD countries in terms of the tax-to-GDP ratio in 2022. In 2022, the United States had a tax-to-GDP ratio of 27.7% compared with the OECD average of 34.0%. In 2021, the United States was ranked 32nd out of the 38 OECD countries in terms of the tax-to-GDP ratio.

Texas pays an exorbitant $17B in excise taxes to the federal government – more than any other state by far and more than the income taxes on Texas's top 1% of earners.

New York has the highest overall tax burden, while Alaska has the lowest. Maine has the highest property tax burden, while Alabama has the lowest. California has the highest individual income tax burden, while seven states (including Texas, Florida and Washington) have the lowest.

According to the U.S. Bureau of Labor Statistics, individuals with a high school diploma earn an average of approximately $1.3 million over their lifetime. Those with a bachelor's degree earn a significant increase, with average lifetime earnings of about $2.3 million.

An individual taxpayer is estimated to spend 13 hours and $240 out-of-pocket costs just to prepare and file one annual tax return. For a small business, the amount of time and money spent on tax compliance is roughly 82 hours and $2,900.

One reason tax prep is more expensive: It can be harder to find someone to do it these days. Fewer people are choosing to study accounting, per University of Texas at Austin accounting professor Lisa De Simone. “Accounting apparently is not as sexy to our college students today as it was maybe 50 years ago,” she said.

According to the IRS filing-season statistics, the average tax refunds in the last five years have been: Tax year 2022—$2,753. Tax year 2021—$3,012.