r/Conservative • u/Pessimist2020 • Dec 22 '20

Americans Excitedly Anticipate Getting Paid With Their Own Money Satire - Flaired Users Only

https://babylonbee.com/news/americans-excitedly-anticipate-getting-paid-with-their-own-money
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u/Little-Reality2459 Dec 22 '20

I am looking at the 2020 tax table if taxable income and just ran a gross income of $40,000 single, no dependents, with nothing more than standard deduction and it’s $3,114 for income tax.

It would be foolish not to put money aside $3000 in a traditional IRA because that would cut your federal tax in half. You may be able to find other deductions as well.

At $40,000 you also have to pay Federal payroll tax (which is not income tax) at 1.45% for Medicare and 6.2% for Social Security about $3000.

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u/[deleted] Dec 22 '20

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u/Little-Reality2459 Dec 22 '20

I hear you. But I just ran the numbers if you made a $3,000 traditional IRA contribution your income tax would fall from $3000 to $1500, so think about it you will get to keep more of your money!

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u/[deleted] Dec 22 '20

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u/Little-Reality2459 Dec 22 '20

Cheers and good for you!

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u/[deleted] Dec 22 '20

Well said I think he is including FICA in his federal tax payment amount