Do You Know How Your Tax Dollars Are Being Spent?

The White House has posted a nifty tool on their web site that shows where your federal tax dollars are being spent . You enter your specific amount of taxes paid and it then shows a breakdown of federal expenditures. It does provide an estimator if you do not have your tax return. I’ll provide some more information below as to how to quickly estimate your own information.

For Social Security taxes, wage earners pay 6.2% of their gross income into Social Security up to income of $106,800. So, if you make over this amount you will simply have paid $6,621.60.  Also, if you defer part of income into a retirement plan (and I hope you do), Social Security is taxed on the total amount of wages earned before those retirement deductions.

For Medicare taxes, wage earners pay 1.45% of their gross income with no income limits. So this is a pretty straightforward calculation. If you earned $100,000 last year, then you paid $1,450 in Medicare taxes. Again, Medicare taxes are paid on wages earned before any retirement deductions are made.

For federal income taxes you want to enter your 2010 tax liability. This is generally found on Line 55 on your tax return, but this tax liability is sometimes reduced by other credits on the tax return on lines 63-71 so make sure you do that math before you determine your 2010 tax liability.

Finally, her is a link to total government spending by category for FY 2010. I find this to be very interesting to see that 80% of our budget goes to the social safety net, national defense and interest on the debt.

I look forward to reading your comments.

About the author

Ken Weingarten, MBA, CFP®

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