How Many Years of Life Does That House Cost?

Re:How Many Years of Life Does That House Cost? by Joof on Friday September 08, 2017 @10:40PM (#15205292)

My understanding is that state income tax can be deducted from federal income tax. Retirement income is usually pretty low as well.

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Re:How Many Years of Life Does That House Cost? by cestith on Monday September 11, 2017 @01:39PM (#15220400)

Very few things are directly deductible from federal income tax. Most deductions are from the taxable income.

So if you pay X in state income taxes, you'd deduct X from your overall federally taxed income. You end up only saving your federal tax rate times X, not X in federal taxes. So if you're taxed at 13% state and 35% federally, you'd pay 13% to the state. Then you'd still pay (barring other deductions) your federal taxes on 87% of your income.

Federal taxes don't work as a bare percentage, though. You pay a lower percentage on everything up to some number, then progressively higher percentages on brackets of your income up to your maximum tax rate. https://taxfoundation.org/2017-tax-brackets/

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