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It’s Time to Celebrate - Tax Freedom Day
For Most Americans Was Yesterday!
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Focused on You. Dedicated to Your Success.
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Millions of Americans filed and paid their income taxes on or before April 18, 2017. Even so, they did not earn enough money yet to cover their total tax obligation. On average, Americans needed work until yesterday, April 23, to earn enough money to pay their taxes. In other words, most people must work 113 days just to pay all individual federal, state, and local taxes, as well as payroll, sales and excise, corporate and property taxes. If you add annual federal borrowing (future taxes owed) into the equation, Tax Freedom Day would be on May 7 this year, 14 days later.
Americans will pay $3.5 trillion in federal taxes and $1.6 trillion in state in local taxes for a total tax bill of $5.1 trillion or 31% of the national income in 2017. More money will be paid in taxes than on housing, clothing, or food this year.
Tax Freedom Day may be sooner for some Americans than others. States with residents making higher incomes that also have higher tax rates celebrate Tax Freedom Day later. Although Pennsylvanians are free from working to pay taxes on April 23, New Yorkers must work until May 11 and New Jersey residents until May 13. Learn more by reading the full report published by the
Tax Foundation
.
Not only do New Jersey residents work longer to meet their tax obligation, but they also pay more money in taxes than Pennsylvanians or New Yorkers. According to the
Tax Foundation
, New Jersey ranks number 49 in the nation for having the highest taxes, followed by Connecticut at 50. An article entitled
You Just Paid More Federal Taxes Than People in Most States
published on April 19 on NJ.com, claims that the average New Jersey taxpayer paid $18,367 in federal income taxes, behind only Connecticut, $22,785; New York, $19,782; and Massachusetts, $18,997. That's $4,316 above the national average of $14,051.
Strategic tax planning can help you keep more of your hard-earned money. Feel free to call us at 610.828.1900 to discuss how you can save money on taxes. Contact either Michael Sexton, CPA, CCIFP, Director – Tax Services at
Michael.Sexton@MCC-CPAs.com
or me at
Marty.McCarthy@MCC-CPAs.com
. We are always happy to help.
Disclaimer:
This alert is for informational purposes only and does not constitute professional advice. Information contained in this communication is not intended or written to be used as tax advice, and cannot be used by the recipient to avoid penalties that may be imposed under the Internal Revenue Code. We strongly advise you to seek professional assistance with respect to your specific issue(s).
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Martin C. McCarthy, CPA
Managing Partner
McCarthy & Company, PC
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