November 18, 2012

Average Effective Income Tax Rate by Age Group

I saw an article on Yahoo recently where the author claimed that Uncle Sam was "taking 15 to 25 percent of the average retiree's income".   I knew that wasn't the case.   The author probably meant the marginal tax rates but the way they worded that it sounds like they think effective tax rates are 15-25%.    Thats certainly not the case.
 
So what are the effective tax rates for seniors?   What about other age groups?

Well I had to figure the numbers based on # of filers and their total incomes and total taxes paid per age group.

TaxFoundation has a page which gives all the data for 2009, they just got it off the IRS site.

Effective Income tax Rate per age group for 2009 : 

All returns 12%
   Under 18 8%
   18 under 26 5%
   26 under 35 9%
   35 under 45 12%
   45 under 55 14%
   55 under 65 15%
   65 and over 13%

This includes all filers in each age group.   Some people didn't have to file and its looking at the Adjusted Gross Income.

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