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nickyschneiderus · 6 years

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Trump fans are starting to realize his tax cut isn’t helping them out

The Tax Cuts and Jobs Act (TCJA) was the largest reform to the American tax code since 1986, and there was no clear consensus among economists and tax experts as to how it would actually impact the bulk of taxpayers. A number of studies determined that its truncation of tax brackets, increasing of standard deductions, and rolling back of the ability to deduct state and local taxes would allow high earners to keep substantially more money, but would actually cost the lowest earners money.

But until at least one tax season had passed, the actual effects of the sweeping changes would still be unknown. As economics professor Joel Slemrod put it in a paper about the TCJA’s impact, the law was “a wonderfully generous gift because it provides scores of natural experiments that could help provide credible estimates of the causal effects of tax policy.”

If the reactions of taxpayers on Twitter are any indication, these “natural experiments” are going to be failures for the Trump administration, and possibly cost the president votes in the next election.

A number of extremely viral posts have claimed that while making the same amount of money, people now owe much more in taxes—going from large refunds to owing amounts that, in some cases, they don’t have.

Last year I got a tax refund. This year, with unchanged salary, I owe $1300.

I’m middle class.

Yet the very wealthy got huge cuts. #ThanksRepublicans

— David Hoffman (@atDavidHoffman) February 3, 2019

Last year I got $3700 back. This year $745. It’s not just lower withholding. My effective tax rate went up by almost 5% YoY. I got a tax increase.

Screw Trump, the GOP, and everyone who voted for them. Watch: As people do their taxes, Trump’s gonna lose even more support.

— Andrew F. Herrmann (@ComDoc_H) February 4, 2019

#ThanksRepublicans I’m paying $3000 more this year than last. Same income. Glad I was able to help the 1%. F#*k you, Donald Trump and Republican Party.

— Jim Bjork (@JimBjorkPPOA) February 4, 2019

@realDonaldTrump , thanks for removing the per member household deduction from your tax code ya twat. Last tax return we got $10 back, now we owe $2,100!!!!!!! But you’re for the middle class, right?

#Congress #TaxScam

— Godless Mama

(@JANDREWS2013) February 4, 2019

Wait, what happened? My tax refund is half of last year.

I thought we were all going to get an additional $4k. LIES! Has anyone seen any improvement?

— George Capen #VetsResist (@george_capen) February 3, 2019

Trouble in MAGA paradise?? Say it isn't so…

pic.twitter.com/NfNftnrRJ3

— JΞSŦΞR ✪ ΔCŦUΔL³³º¹ (@th3j35t3r) February 5, 2019

Last year I got a $750 federal refund. This year I owe $5000. I usually file early but you can go fuck yourself all the way until April @realDonaldTrump and @SenMajLdr and @SpeakerRyan and @SenateGOP and @HouseGOP. I still have $100,000 in student loans but sure I'll find $5k.

— Ben (@notsince1973) January 31, 2019

It’s important to note that these individual stories can’t be confirmed. Many didn’t respond to requests from the Daily Dot. And plenty come from accounts with anti-Trump hashtags. But it’s not just #resist Twitter that claims to be seeing its tax hit go up despite the TCJA’s massive cuts.

Many people who claim to have voted for Trump in 2016 have been rewarded for their support with a whopping tax bill, or at least less of a refund.

Wait til you file your taxes. Middle class just lost half their return. Lowest refund I have ever had and I am 50yrs old. No wall and now this tax reform sucks too!! Starting to doubt Trump. I voted for him and trusted him too.

— Speziale-Matheny (@Speciale3886) January 27, 2019

I voted for this crack pot President, what a mistake I made, getting screwed on my taxes, loosing roughly $3,500, my mortgage interest is not deductible, wtf? #TaxScam #goptaxscam #taxrefund #presidentsucks #TaxReturns

— Nick (@nickyd6865) February 5, 2019

@realDonaldTrump I just got back from my tax accountant. All I can say is you phucked us bad. On the same income as 2017 I went from getting a ~$6,000 refund for both state and federal to owing ~$2,000 total. I will not vote for you again. Your tax changes SUCK!

— Jeff Dearborn (@JeffDearborn) February 1, 2019

Worse tax return I had in a decade! I admit I voted for @realDonaldTrump but he has officially lost my vote for 2020.

— A9N7G3 (@973angie) January 23, 2019

As statisticians and skeptics are fond of pointing out, the plural of “anecdote” is not “data,” particularly when the anecdotes come from anonymous Twitter accounts, some of which display the posting tendencies of bots.

Beyond that, it’s hard to tell whether these experiences will be repeated across the board, as tax filing season has only just started, and people who usually get refunds are more likely to file early.

But it’s clear that nobody knows what the impact of the TCJA on the majority of Americans’ tax refunds—or even who will be getting back what. That extends to the tax professionals whose careers are built around knowing stuff like this.

Thanks to the @GOP #TaxReform we went from getting $1200 in refund to OWING $2400.

Give corporations and millionaires a tax break so Americans have to pay for it, huh?

Burn the GOP down. Salt the earth where they stood.

— Plastic Man (@Almondrobopanda) February 2, 2019

“It’s still early to determine how everyone is being affected on the new tax laws, California CPA Gerry Andrade told the Daily Dot via email. “For the few returns that have been completed, the refunds have been less than the previous year, due to the adjustment of the tax withholding tables. Federal Income Tax Withholdings were reduced to increase employee take home pay. However, the elimination of the exemption deductions, employee business expenses and the limits on the property tax and state income tax deductions, have impacted tax refunds compared to previous years.”

While Andrade couldn’t predict exactly how everyone’s individual taxes will shake out, he did confirm that the outage seen on Twitter represents something very real “We anticipate that some of the taxpayers who have always planned on breaking even, meaning no tax due or refund, will be disappointed,” Andrade wrote. “They will probably owe more than they anticipated.”

One government study, done by the General Accounting Office, found that as many as four million more filers will owe the IRS money this year, and another four million will receive smaller or no refunds, compared to the system that had been in place earlier.

The culprit, economists agree, will be under-withholding—not adjusting one’s W-4 to take into account the new tax brackets and changes in deductions. Essentially, they’ve been getting less taken out of their paychecks week-to-week, and will have to make up the difference now.

For 2017, 102 million tax filers got at least some money back, having withheld too much from check to check, and getting it back with a refund. But with the TCJA, this number could drop dramatically—and if one goes by Twitter, it already has.

Welp. I missed the memo and have a large surprise tax bill thanks to the Tax Jobs and Cuts Act. #taxrefund #nonexistent @forbes @WSJ @SenAlexander https://t.co/yfcqHvDhRy

— Jacy Warrell (@JacyWarrell) February 3, 2019

But despite the avalanche of angry tweets from tax filers, it’s not clear at all that most middle-class taxpayers will owe money or see lower refunds. A number of sources claim just the opposite, that refunds will be higher and more frequent this year.

One Morgan Stanley economist told the New York Times that refunds for the average taxpayer will be “much higher than they expected,” with the firm estimating that taxpayers will be getting back as much as 26 percent more money this spring compared to last spring. In fact, that Morgan Stanley study found that taxpayers not only aren’t under-withholding, the changes in the tax code have led to more over-withholding, essentially loaning money to the government interest-free.

Other economists believe that the impact of the new tax laws will vary from family to family, with wide variations. Because child tax credits are higher, families with more dependents will likely see more money coming back. It will also vary region to region, as states with higher income taxes will see fliers be able to deduct less due to a cap on state and local tax deductions.

Thanks to the #TrumpTaxScam I am middle class and my tax refund has decreased by over $3000. I live in one of the most expensive states in the nation. Super excited that the tax burden on the super wealthy and corporations has been lessened and shifted to the middle class.

— ChilCollins (@johnprugh) February 4, 2019

An H&R Block report generally estimates that “those who itemized deductions in 2017 and have no dependents are one of the groups most at risk of owing instead of getting a refund,” as well as homeowners in states with high tax rates, and “employees who deducted unreimbursed business expenses for 2017” as business deductions have been curtailed.

So if you’re a small business owner or self-employed, with no dependents, and live in a state with a high tax rate; you’re probably going to get hit hard by the changes. Is this the category that Twitter tax complainers belong to?

The only thing that’s clear is that nobody knows for sure. With tax filing just having gotten underway, it’s likely that social media will see more accounts from both people who owe more, and from those who are getting more back. Every individual’s experience will vary.

from Ricky Schneiderus Curation https://www.dailydot.com/layer8/trump-tax-cut-twitter/

#Ricky Schneiderus Curation

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taxchecking-com · 6 years

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How Did We Start Paying Income Tax?

Hey so how did you feel when you received your first paycheck? I was pretty excited I'll be honest. I worked for weeks and weeks and there in the sealed envelope was my very first hard-earned compensation. I had so many plans about what I was going to do with the money. But those hopes were brutally dashed the moment I read the bottom line. By the time the money actually got to me, it had been sliced up like a pizza. An alphabet soup of government agencies each got their cut before I did. What are taxes anyway? How do they work? How did we end up with this present system? First things first, the basic idea of taxation is pretty simple. There's some sort of state or similar authority that imposes a levy on an individual or legal entity like a corporation or something. If you can't pay, then you can be charged with a crime. This is a very old concept. It dates back as far as Mesopotamia and Egypt's Old Kingdom. Nowadays the tax man's not gonna beat the crap out of you for being late. But the system is way, way more complicated. In the United States the taxes you pay vary from person to person, from company to company, from check to check, and then from state to state. However most people do have to pay the federal income tax. The US tax system is huge. Complex doesn't even begin to describe it. A better word would be byzantine, which I looked up earlier. In 1913 Congress passed the 16th Amendment. The 16th Amendment says this specifically: "The Congress shall have power to lay and collect taxes "on incomes from whatever source derived, "without apportionment among the several States, "and without regard to any census or enumeration." Okay, let's be honest. While most folks in the US only think about taxes when April approaches, the process really begins when you start a new job. You and your employer agree on your compensation or before tax income. Next thing you do is fill out a form called the W-4 and it determines how much income tax your employer will withhold from each check. Why do they do this? Good question. Employers are required by law to withhold income tax and deposit the money in a federal reserve bank. This is how the federal government maintains a steady stream of income while also drawing interest on your tax dollars. Pretty clever, huh? So instead of paying taxes once a year in April, you're actually paying them all year long, every time you get a paycheck. The rules change when you're a freelancer or independent contractor or you're otherwise self-employed. Nobody's gonna withhold income taxes each time you get paid by a client or a customer so it's up to you to manage what you owe. What's a good way to think of income taxes? Let's think of filing income taxes in April kind of like settling up with the IRS. All you're doing is figuring out if you paid the right amount of cash. If you paid too much, boom, you get a refund. If you paid too little, boom, you're writing another check. Income tax forms like the 10-40 are notoriously confusing. But that's because they're based on a code that's more than 5000 pages long, because somebody thought that would be a good idea. Presidential candidates are always talking about revising the system, but how? Well there are all sorts of potential alternatives like, for example, this thing called the flat tax. Under a flat tax system, everybody pays the same rate. Proponents of a flat tax system say that it would do away with all the complicated codes and forms. Critics say this system favors the wealthy and that's not the most controversial idea. There's another one. It's even more controversial than the flat tax. The idea that we should just repeal the 16th Amendment altogether, abolish income tax, don't worry about it. In place of income tax then, they would have a national sales tax. Many countries around the world already levy a national sales tax. You've heard of it before. It's called a value added tax, or VAT. The difference is that most of these countries also collect income tax. US backers of this plan want to get rid of the IRS and charge a flat 10%-25% on all retail purchases of new goods and services. People who are fans of this say that a consumption tax collects revenue from everybody, even illegal residence, tax dodgers, tourists from other countries et cetera. Opponents say it puts an unfair burden on the middle and lower classes who buy a lot of the stuff that would be taxed. They also say it might reduce consumer spending, slowing the economy down. Then they add that in order for it to be fair, it would have to be applied to the purchase of stocks and bonds in addition to consumer goods. Yeah, so it's no secret that taxes are a bigger subject in many countries. The United States has had a, at best, a rocky relationship with this issue. The US doesn't just have one of the most complicated tax systems in the world it also grows more complicated each year. This is a politically charged, divisive issue but there is one thing that everyone can agree on. The current system is not perfect. So here's a question. What would you change if you were in charge? Let us know in the comments. Go ahead and like and subscribe. Thank you so much for watching.

https://youtu.be/gBTq1Mvrbjs

#How Did We Start Paying Income Tax?#taxes #checking taxes

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fesahaawit · 7 years

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Are You Financially Average?

Mornin’ mornin’!

So last week we went over 15 great financial goals to hit if you wanted to be ABOVE average in this wacko world of ours, but today I thought it would be fun to see just how close we are to being AVERAGE average compared to others ;)

Because why not, right? What else are we going to do today?

Stats are below in bold, followed by my own thoughts & answers… I’ll let you decide which areas you actually want to be average on, and which you don’t ;)

10 Financial Statistics of The Average American

(The data is mostly from 2015 and chock-full of other variables that we should probably pay attention to, but take them for what they’re worth and just play along with this blogger here ;) Big shout to The Motley Fool where I borrowed these stats from.)

#1. The average American gross household income is $71,258

Pretty decent… Our household income this year will be around $110,000 between my wife’s new job and my online projects, but obviously if there’s only one of you in your household it’s going to skew your results :) Verdict for us: above average

#2. The average American household with debt owes $132,529

Dayuuummm… Although it *does* include mortgages and student loans, cars, etc, so it’s not ALL credit card debt. We’ve opted to go back to renting so we don’t have any mortgages, but we do have a car note with $12,142.79 left which makes our verdict here below average.

#3. The average American gave $5,491 to charity in 2015

Pretty good!!! Probably because the higher earners skew it, but still – no shame in trying to keep up! And outside all the gobs of time I spend helping people with their $$$, we fail here with only giving about $1,000 in cash and donations last year… Though we did give out over $14,000 so far with our Community Fund I helped launch, and my $20/mo charity trick is now auto. pumping out $100/mo to 5 of my favorite organizations, so we are getting better! Verdict: below average (but not for long!)

#4. The average American has a FICO credit score of 700

Much better than I’d expect? I’m not exactly sure what my *FICO* score is, but I do know from last week’s checking that we’re at 829 with Experian and 835 w/ TransUnion and 833 w/ Equifax. So I would assume we’d be in the 800’s as well with FICO. And man are there a lot of different scores out there? You can learn more about most of them here, but again as long as you’re at least monitoring one of them consistently you’ll be just fine. J$ verdict: above average

#5. The average American’s 401(k) balance is $96,288

I no longer have a 401(k) since becoming self-employed, but I do have about $504,000 in my SEP IRA which is an equivalent (minus those glorious free matches!!!) so it’s safe to say we’re way above average here too. You could also probably include IRAs and any other types of retirement accounts here which of course paints a much bigger picture, especially if you don’t even have access to a 401(k) plan.

Here’s a cool graph Motley Fool included that breaks down the average totals by *age* – which is a much fairer comparison. It comes from Vanguard’s 2016 How America Saves report (PDF):

(For more thoughts around this, check out my postings on Twitter and Facebook where there were some pretty lively conversations going in response to this graph!)

#6. The average personal savings rate in the U.S. is 5.5%

Ugh… Although apparently this is up from 1.9% in 2005, so yay? I’m never quite sure exactly how one goes about calculating their savings rate (do you use pre-tax money? After-tax? Does investing count? What about debt payments?) but here’s what I get depending on what I’m including – all based on pre-tax income:

Actual “savings” rate: 0% (all our extra money goes to maxing out retirement accounts and debt)

Investing rate: 26% (SEP IRA, ROTH IRA)

Investing + debt pay off rate: 34% (SEP IRA, ROTH IRA, Car loan)

Verdict: above average

#7. Only 18% of Americans actively contribute to an IRA

Double ugh… I’m not sure what’s considered “active” here (I usually contribute only once a year to max it out vs monthly deposits) but either way not good, America. Not good! J$ verdict: above average

#8. The average American’s tax refund in 2016 was $2,860.

I know people either LOVE getting refunds or think it’s asinine that you “give the government a loan,” but as far as I’m concerned a nice surprise is always better than an ugly one. And I find that when people get a *chunk* of money vs smaller more frequent ones, they tend to apply it more towards bigger goals anyways since it seems to make a much larger difference. So to me it’s all in HOW YOU USE THE MONEY vs when you get it.

As for our typical returns, we usually break even since we pay taxes quarterly, however last year we got an unexpected return of $5,000 when we overpaid on part of some money that came in at the end of the year. Which of course went right back into investments! And again, a much better surprise getting $5,000 back than the opposite ;)

Verdict: above average (not sure how to color code this, haha…)

#9. The average American pays an effective federal income tax rate of 13.5%

Wow! Wouldn’t have ever guessed that! Not that I pay attention too much to this stuff (borrrrringgggg). And similar to the whole savings rate thing I wasn’t quite sure how to calculate this puppy either, however a quick Google search shot me a fast answer and was able to figure it out nicely.

Per Investopedia:

An individual’s effective tax rate is calculated by dividing total tax expense from line 63 of his 1040 Form by his taxable income from line 43 of that form.

Easy enough, right? For 2016 that came out to 17% for us (much lower than usual probably due to us taking a loss when we sold our house earlier in the year, as well as my wife maybe going back to work?), but for 2015 it was quite higher at a whopping 43%! Can that be right?? This is exactly why I use an accountant as I don’t trust myself to calculate crap haha…

Verdict: above average (I’m gonna say this is both good and bad: bad cuz we’re obviously paying more than the average, but good in that it typically means we’re also *earning more,* as well as giving more back to support our state/country too)

#10. The average American’s Social Security retirement benefit is $1,363/mo

Reason #38 to make sure you’re saving and investing on your own!! Can’t rely on anyone to support you in retirement :( I cant find my login/password to the site at the moment, but here’s what our future payments were estimated at two years ago. I’d imagine it’s only gone up?

(I like how “early retirement” is 62 btw… surely they haven’t come across FIRE blogs! ;))

You can easily access all your own social security stuff these days here: http://ift.tt/1Dgs85A (provided you remember your password!). It’s also helpful when trying to run your Lifetime Wealth Ratio too that I conjured up :) Divide your current net worth by your *total earnings* over your lifetime and see what % of it you still have left! Just make sure to have a box of tissues around as most times it’s pretty depressing, haha… Verdict: above average

#11. Bonus: The average American will spend $165.14 on Thanksgiving expenses this year (via LendEdu)

If only that read Christmas! :) We’ll probably only be spending around $30 or $40 for gas and some side dishes to the dinners we’ll be attending this year (thanks mom and dad!), but I know some are flying all over the place which I’d imagine gets pricey pretty fast. Good thing we love our friends and families! Verdict: below average

(my favorite all-time gift, given to me by Baby Penny!)

BTW, right before I went to publish this I got two more T-Day stats emailed to me, by Ebates:

22% of Americans plan to begin their Black Friday shopping online after Thanksgiving dinner

11% of Americans admit to shopping on their mobile phones during Thanksgiving dinner

Wow…

So there you have it! The average financial stats of your fellow man and woman :)

Where do you land? More average than below average? More below than above?

It looks like I’m mostly above average in the right places and below average in the others, but areas of improvement can be found in both the charity and the effective tax rate areas… I’m still amazed by how all those early retirees pay 0% in taxes btw, even though they’re all millionaires!! Talk about being crafty!

See this post here by Go Curry Cracker to see what I mean: Never Pay Taxes Again (hint: you’ll need to live on far less than you’re probably doing right now to pull this off)

Thanks for playing along! No one else in real life likes talking about this stuff with me ;)

**** PS: Here’s the link again to the Motley Fool article if you want to learn more: 10 Incredible Financial Statistics That Sum Up the Average American

Are You Financially Average? posted first on http://ift.tt/2lnwIdQ

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heliosfinance · 7 years

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Are You Financially Average?

Mornin’ mornin’!

Because why not, right? What else are we going to do today?

Stats are below in bold, followed by my own thoughts & answers… I’ll let you decide which areas you actually want to be average on, and which you don’t ;)

10 Financial Statistics of The Average American

(The data is mostly from 2015 and chalk full of other variables that we should probably pay attention to, but take them for what they’re worth and just play along with this blogger here ;) Big shout to The Motley Fool where I borrowed these stats from.)

#1. The average American gross household income is $71,258

#2. The average American household with debt owes $132,529

#3. The average American gave $5,491 to charity in 2015

#4. The average American has a FICO credit score of 700

#5. The average American’s 401(k) balance is $96,288

Here’s a cool graph Motley Fool included that breaks down the average totals by *age* – which is a much fairer comparison. It comes from Vanguard’s 2016 How America Saves report (PDF):

(For more thoughts around this, check out my postings on Twitter and Facebook where there were some pretty lively conversations going in response to this graph!)

#6. The average personal savings rate in the U.S. is 5.5%

Actual “savings” rate: 0% (all our extra money goes to maxing out retirement accounts and debt)

Investing rate: 26% (SEP IRA, ROTH IRA)

Investing + debt pay off rate: 34% (SEP IRA, ROTH IRA, Car loan)

Verdict: above average

#7. Only 18% of Americans actively contribute to an IRA

#8. The average American’s tax refund in 2016 was $2,860.

Verdict: above average (not sure how to color code this, haha…)

#9. The average American pays an effective federal income tax rate of 13.5%

Per Investopedia:

An individual’s effective tax rate is calculated by dividing total tax expense from line 63 of his 1040 Form by his taxable income from line 43 of that form.

#10. The average American’s Social Security retirement benefit is $1,363/mo

(I like how “early retirement” is 62 btw… surely they haven’t come across FIRE blogs! ;))

You can easily access all your own social security stuff these days here: http://ift.tt/1Dgs85A (provided you remember your password!). It’s also helpful when trying to run your Lifetime Wealth Ratio too that I conjured up :) Divide your current net worth by your *total earnings* over your lifetime and see what % of it you still have left! Just make sure to have a box of tissues around as most time it’s pretty depressing, haha… Verdict: above average

#11. Bonus: The average American will spend $165.14 on Thanksgiving expenses this year (via LendEdu)

(my favorite all-time gift, given to me by Baby Penny!)

BTW, right before I went to publish this I got two more T-Day stats emailed to me, by Ebates:

22% off Americans plan to begin their Black Friday shopping online after Thanksgiving dinner

11% of Americans admit to shopping on their mobile phones during Thanksgiving dinner

Wow…

So there you have it! The average financial stats of your fellow man and woman :)

Where do you land? More average than below average? More below than above?

See this post here by Go Curry Cracker to see what I mean: Never Pay Taxes Again (hint: you’ll need to live on far less than you’re probably doing right now to pull this off)

Thanks for playing along! No one else in real life likes talking about this stuff with me ;)

**** PS: Here’s the link again to the Motley Fool article if you want to learn more: 10 Incredible Financial Statistics That Sum Up the Average American

Are You Financially Average? published first on http://ift.tt/2ljLF4B

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fesahaawit · 7 years

Text

Are You Financially Average?

Mornin’ mornin’!

Because why not, right? What else are we going to do today?

Stats are below in bold, followed by my own thoughts & answers… I’ll let you decide which areas you actually want to be average on, and which you don’t ;)

10 Financial Statistics of The Average American

#1. The average American gross household income is $71,258

#2. The average American household with debt owes $132,529

#3. The average American gave $5,491 to charity in 2015

#4. The average American has a FICO credit score of 700

#5. The average American’s 401(k) balance is $96,288

Here’s a cool graph Motley Fool included that breaks down the average totals by *age* – which is a much fairer comparison. It comes from Vanguard’s 2016 How America Saves report (PDF):

(For more thoughts around this, check out my postings on Twitter and Facebook where there were some pretty lively conversations going in response to this graph!)

#6. The average personal savings rate in the U.S. is 5.5%

Actual “savings” rate: 0% (all our extra money goes to maxing out retirement accounts and debt)

Investing rate: 26% (SEP IRA, ROTH IRA)

Investing + debt pay off rate: 34% (SEP IRA, ROTH IRA, Car loan)

Verdict: above average

#7. Only 18% of Americans actively contribute to an IRA

#8. The average American’s tax refund in 2016 was $2,860.

Verdict: above average (not sure how to color code this, haha…)

#9. The average American pays an effective federal income tax rate of 13.5%

Per Investopedia:

An individual’s effective tax rate is calculated by dividing total tax expense from line 63 of his 1040 Form by his taxable income from line 43 of that form.

#10. The average American’s Social Security retirement benefit is $1,363/mo

(I like how “early retirement” is 62 btw… surely they haven’t come across FIRE blogs! ;))

#11. Bonus: The average American will spend $165.14 on Thanksgiving expenses this year (via LendEdu)

(my favorite all-time gift, given to me by Baby Penny!)

BTW, right before I went to publish this I got two more T-Day stats emailed to me, by Ebates:

22% of Americans plan to begin their Black Friday shopping online after Thanksgiving dinner

11% of Americans admit to shopping on their mobile phones during Thanksgiving dinner

Wow…

So there you have it! The average financial stats of your fellow man and woman :)

Where do you land? More average than below average? More below than above?

See this post here by Go Curry Cracker to see what I mean: Never Pay Taxes Again (hint: you’ll need to live on far less than you’re probably doing right now to pull this off)

Thanks for playing along! No one else in real life likes talking about this stuff with me ;)

**** PS: Here’s the link again to the Motley Fool article if you want to learn more: 10 Incredible Financial Statistics That Sum Up the Average American

Are You Financially Average? posted first on http://ift.tt/2lnwIdQ

0 notes

fesahaawit · 7 years

Text

Are You Financially Average?

Mornin’ mornin’!

Because why not, right? What else are we going to do today?

Stats are below in bold, followed by my own thoughts & answers… I’ll let you decide which areas you actually want to be average on, and which you don’t ;)

10 Financial Statistics of The Average American

#1. The average American gross household income is $71,258

#2. The average American household with debt owes $132,529

#3. The average American gave $5,491 to charity in 2015

#4. The average American has a FICO credit score of 700

#5. The average American’s 401(k) balance is $96,288

Here’s a cool graph Motley Fool included that breaks down the average totals by *age* – which is a much fairer comparison. It comes from Vanguard’s 2016 How America Saves report (PDF):

(For more thoughts around this, check out my postings on Twitter and Facebook where there were some pretty lively conversations going in response to this graph!)

#6. The average personal savings rate in the U.S. is 5.5%

Actual “savings” rate: 0% (all our extra money goes to maxing out retirement accounts and debt)

Investing rate: 26% (SEP IRA, ROTH IRA)

Investing + debt pay off rate: 34% (SEP IRA, ROTH IRA, Car loan)

Verdict: above average

#7. Only 18% of Americans actively contribute to an IRA

#8. The average American’s tax refund in 2016 was $2,860.

Verdict: above average (not sure how to color code this, haha…)

#9. The average American pays an effective federal income tax rate of 13.5%

Per Investopedia:

An individual’s effective tax rate is calculated by dividing total tax expense from line 63 of his 1040 Form by his taxable income from line 43 of that form.

#10. The average American’s Social Security retirement benefit is $1,363/mo

(I like how “early retirement” is 62 btw… surely they haven’t come across FIRE blogs! ;))

You can easily access all your own social security stuff these days here: http://ift.tt/1Dgs85A (provided you remember your password!). It’s also helpful when trying to run your Lifetime Wealth Ratio too that I conjured up :) Divide your current net worth by your *total earnings* over your lifetime and see what % of it you still have left! Just make sure to have a box of tissues around as most time it’s pretty depressing, haha… Verdict: above average

#11. Bonus: The average American will spend $165.14 on Thanksgiving expenses this year (via LendEdu)

(my favorite all-time gift, given to me by Baby Penny!)

BTW, right before I went to publish this I got two more T-Day stats emailed to me, by Ebates:

22% off Americans plan to begin their Black Friday shopping online after Thanksgiving dinner

11% of Americans admit to shopping on their mobile phones during Thanksgiving dinner

Wow…

So there you have it! The average financial stats of your fellow man and woman :)

Where do you land? More average than below average? More below than above?

See this post here by Go Curry Cracker to see what I mean: Never Pay Taxes Again (hint: you’ll need to live on far less than you’re probably doing right now to pull this off)

Thanks for playing along! No one else in real life likes talking about this stuff with me ;)

**** PS: Here’s the link again to the Motley Fool article if you want to learn more: 10 Incredible Financial Statistics That Sum Up the Average American

Are You Financially Average? posted first on http://ift.tt/2lnwIdQ

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