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Don't get to discouraged if almost 50% of your earnings end up going to the government. The
above calculator assumes that each dollar is being taxed at your top rate. In fact, a married
couple who uses the standard deduction can earn $15,600 before their first dollar is taxed by
the Federal government for income tax purposes. The next $14,000 would be taxed at 10%, the next
42,800 would be taxed at 15% and
only earnings over $72,400 would be taxed at 25%. A married couple who uses the standard
deduction and earns $75,000 would be in the 25% tax bracket but would only pay $8,401
in Federal taxes. That gives them an average Federal rate of only 11%. (If they had four
kids that quality for the child tax credit their effective rate would be only 5.8%.)
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