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Despite the tax rate reductions for this Jobs and Growth Tax Relief Reconciliation Act of 2003, leading marginal income tax bracket for many retirees can be a whopping forty six.3%. Why? Because Social Security benefits are subject to income in taxes. Those affected are Social Security recipients who have the good fortune (misfortune?) always be subject to both the 25% tax bracket and the 85% inclusion rate for Social Security benefits.

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For his 'payroll' tax as an employee he pays 7.65% of his $80,000 which is $6,120. His employer, though, must cash same several.65% - another $6,120. So one of the employee brilliant employer, the fed gets 15.3% of his $80,000 which comes to $12,240. Keep in mind that an employee costs a company his income plus 1.65% more.

Copyright 2010 by RioneX IP Group LLC. All rights shy. This material may be freely copied and distributed subject to inclusion of these copyright notice, author information and all of the hyperlinks are kept whole.

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