• Home
• Coaching
• Blog
• Contact

How Much Do You REALLY Pay in Taxes?

If you're new here you may want to sign up for my weekly newsletter. Thanks for visiting!

I worked on a special project last month.  As we went through the month, tracking our spending, doing our budget, I added in a special category for “taxes paid”.  I tracked all the taxes we paid, sales tax, taxes on gas, property taxes, payroll taxes, taxes on our bills, everything.

Here’s how it turned out.

In January we paid a total of $1,129.60 in taxes.

It broke down like this:

• Sales Tax: 162.28
• Taxes on Gas: 45.22
• Property Tax: 195.33
• Payroll: 677.92 (Just my husband’s income since I’m self-employed)
• Bills: 48.85 (taxes on our bills like cable, electric, etc.)

I’m not sure how I feel about that.  One hand it’s $1,129.60 out of my pocket that just went “poof”.  It sure would be nice to have an extra $1,100 every single month!  On the other hand, for $1,129.60 I got streets to drive on, my kids went to school,  police protection, military protection, etc.  If there were no government I’d have to pay a lot more than $1,100 to provide those services for myself.

I didn’t add in things like the bill to the city.  Is that a tax?  I don’t see it that way since I pay for services.  This bill covers trash pick-up, water, and gas.  I assume if I didn’t pay it I would lose those services.  So in my mind it’s not a tax.  I also didn’t include registering my cars, which runs us about $60 a month if you were to take it on a monthly basis.  I guess do consider that a tax since it have to pay it just to use my own property.  But it’s kinda sticky.  I don’t have to pay it if I don’t own a car. If all the roads were private I would have to pay tolls to use the roads to the companies that owned the streets so if you think of it that way it is a pay for service kind of thing.  It’s a blurry issue so I didn’t include it in my “taxes paid”.   Stamps are the same way.

I thought about bills that are required by the government, like car insurance.  Could that be considered a tax?  The government passed a law that says I have to spend this money. Does that make it a tax?  Again, if you think “I have to pay this in order to use my own property” then it’s tax-like.  However I think it’s just as blurry as the registration so I didn’t include it as taxes paid.

Also there are quite  few things that are just sold with taxes included.  So it’s hard to know the exact amount of taxes in the bill.  We rented a condo in California for a week.  There weren’t any taxes on the bill but I have NO DOUBT quite a bit of that bill included taxes. Unfortunately, I had no way of calculating it.  Same with the bill from the hair stylist.  I’m sure there were sales taxes and maybe other state fees included in that bill but it’s not listed separately on the bill so I have no way of knowing.   There were quite a few transactions like that where you just don’t know what’s actual bill and what’s taxes.

I’d love to hear your thoughts!  Please leave me a comment down below to let me know what you think!

Did you enjoy this post? Why not leave a comment below and continue the conversation, or subscribe to my feed and get articles like this delivered automatically to your feed reader.

Copyright Money Talks | Theme by DailyBlogTips