Kiplinger Today

Tax Breaks

Where Do You Rank as a Taxpayer?

Ever wonder how your income stacks up against your fellow workers? Do you make enough to put you in that at-once extolled and excoriated 1% of richest Americans? In the bottom 50%? Somewhere in between?

And, no matter how “rich” or “poor” or “middle class” you are, are you bearing your “fair share” of the nation's tax burden? Do you have the faintest idea what portion you pay now . . . beyond a gnawing feeling that it’s too darn much?

SEE OUR TOOL: Calculate Your Tax Share

To help answer such questions, we created a tool to show how the nation's taxable income and the country's federal income tax bill are distributed among its citizens. Are the wealthy coddled with tax favors? Is the middle class unfairly burdened? Our tool uses the latest IRS data to shine a bright light into what are too often murky shadows. We’ll also show you how your own income stacks up with that of your fellow Americans.

Are you ready to see where you fit in? With our simple calculator, enter a single number from your latest tax return and you’ll instantly know the answer.


What the numbers show

The latest numbers from the IRS—based on just released data from 2012 tax returns—show what it takes to be among the top 1% of income earners: adjusted gross income of $434,682 or more. That’s almost $50,000 more than it took to buy into this rarified status a year earlier. The 1.4 million Americans with this elite status reported 21.9% of the total adjusted gross income reported on 2012 returns.

That's right. One percent of taxpayers reported almost 22% of all income. And that same tiny group kicked in 38% of all the federal income taxes paid. (A year earlier, the top 1% of earners kicked in 35% of all taxes paid.) How much do you need to make to be in the top 50% of earners? Just $36,055.

Fall below that level and you are in the bottom half, along with about 68 million of your fellow taxpayers. All told, that group earned just 11.1% of the AGI reported on 2012 federal returns. And they paid 2.78% of all the income taxes paid.

Use our calculator to see if you’re in the top 1%, 5%, 10%, 25%, 50% . . . or bottom 50% of income earners.

Our income and tax-burden breakdowns come from information reported on 2012 individual income tax returns. Income categories are based on adjusted gross income.

(Note that these figures include only federal income taxes. According to one study, more than half of all wage earners pay more in Social Security and Medicare taxes than they do income tax. The percentage of those paying more payroll tax than income tax soars to nearly 90% if you count both the employer and employee share of those levies.)

For historical perspective, back in 1986, the top 1% of earners reported 11% of all income and paid 26% of the income taxes; the lower-earning 50% made 17% of the income and paid 6% of the nation’s individual income tax bill.

Table: Breakdown of Income and Taxes Paid by Category

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