[coffeecat]

shrug

I hear that sentiment a lot, but it doesn't seem right to me. My salary is pretty close to the median plumber's income, and my family's effective tax rate last year came in at... 1.6%. And that's with all retirement account contributions going toward Roth accounts. If we'd chosen to contribute to traditional IRA/401k accounts instead, the EITC and child tax credit would easily turn our tax bill negative.

[Volundr]

A quick search tells me the median plumber salary is ~$60k. Your telling me your entire tax burden is ~1k? I find that hard to believe, and if true is pretty darn atypical. That's closer to what I was paying when I was making ~10/hr.

[coffeecat]

Yes. We had $50k of taxable W2 income ($63k including pre-tax insurance premiums and HSA contributions), $13k of taxable family leave benefits, $4k of interest/dividends (mostly qualified dividends, taxed at 0%), and $9k of long-term capital gains (taxed at 0%), making our pre-tax gross income about $89k. Only $66k of that is subject to taxes; the standard deduction brings that down to $37k, on which the tax is $4k. With a $2,000 child tax credit, $400 saver's credit, and $200 foreign tax credit, our tax liability is reduced to $1400, which is 1.6% of $89k.