Feeling like “the tax man cometh” too often?

With a recent notice from the IRS that the tax filing deadline has been pushed back to May 17th, you may be feeling a little off the hook for now. The pressure is off, at least for the moment.  However, while there is a momentary lull in the action, consider a few facts about taxation which might make you think about taxes differently. Historic Tax Rates While it’s easy to feel like you are paying too much in taxes, especially at this time of year, it’s important to put this in perspective. In 2021, the top marginal tax rate is 40.8%, which is a combination of the top marginal bracket of 37% and the 3.8% Medicare surtax for high earners. That sounds like a very high tax rate but consider that the historic average top marginal tax rate (1925-2026) is 57.5%, with rates in the 1950’s topping 90%.  The marginal tax rate considers the highest tax bracket you hit with your taxable income, while the effective tax rate is the percentage you are effectively paying when your income across all Read on! →