For starters, it depends on what kind of tax form you filed with your job.
If you filed a Form W-4, also known as an Employee’s Withholding Certificate, this should help determine the amount of money withheld from your paycheck for tax purposes.
However, if you’re an independent contractor or freelancer, you might not always have the luxury of that form nor of taxes automatically being withdrawn from your paycheck.
With a W-4, it’s helpful to be as accurate as possible when filling it out.
Otherwise, you may wind up owing the IRS additional money at the end of the tax year and may also have to pay a penalty.
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But if too much of your paycheck has been allotted for taxes, you could be awarded a refund.
It’s important to note that any life changes, including marriage, getting a raise, or changing jobs, are reasons to update your W-4.
How much of my income goes to taxes?
Your W-4 is the biggest determining factor when it comes to taxes.
This form contains information about your filing status, meaning if you’re a single filer, have a spouse, or have any dependants.
But your income also plays a significant role, as that determines which tax bracket you belong to.
Your income can be taxed at different rates, according to the progressive tax system in the US.
For example, the lowest rate in the 2022 tax bracket is 10%, which applies to those single individuals with an income of $10,275 or less.
For married couples filing together, the income amount is $20,550.
The tax rate increases to 12% for single individuals with incomes over $10,275, capping at $41,775, according to CNBC.
What exactly do the taxed dollars go towards?
Tax dollars help fund a variety of federal and state programs.
Some of your federal taxes go towards the Federal Insurance Contribution Act (FICA).
This helps support programs including Social Security and Medicare.
State and local taxes go towards a variety of programs and services including education, healthcare, infrastructure support, and more.
We explain when you can file 2021 taxes.
We also explain how many bank accounts you should have in 2022.