Tax Read Time: 2 min

What Do Your Taxes Pay For?

Taxes are one of the biggest budget items for most taxpayers, yet many have no idea what they’re getting for their money.

The average household spends more on taxes than on groceries, clothing, or healthcare. In fact, 11% of our income, on average, goes to personal income taxes, which doesn’t include sales tax, property tax, Social Security payments, or Medicare payments. So what do we get in return?1

The accompanying chart breaks down the $6.27 trillion in federal spending for 2022 into major categories. One of the biggest categories is Social Security, which consumes almost one-fourth of the budget. Safety net programs, which includes food assistance and unemployment compensation, takes another 11%. Defense and related items take 18% of the budget, and 24% goes to Medicare and health programs.2

Are taxes one of your biggest budget items? Take steps to make sure you’re managing your overall tax bill. Please consult a tax professional for specific information regarding your individual situation.

Pieces of the Federal Pie

More than 60% of 2022 federal spending was used for Social Security, Medicare, defense, and related programs.

Source: Treasury.gov, 2022

1. ValuePenguin.com, September 1, 2022
2. Treasury.gov, 2022

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Share |
 

Related Content

4 Tips to Overcome Zoom Fatigue

4 Tips to Overcome Zoom Fatigue

Tips for overcoming online meeting (Zoom, MS Teams, etc.) weariness

Mortgages in Retirement

Mortgages in Retirement

Explore the benefits and drawbacks to paying off your mortgage prior to retirement with this article.

3 Ways Charitable Giving Can Benefit Your Business

3 Ways Charitable Giving Can Benefit Your Business

More and more companies are choosing to donate to charities through volunteering their time, resources, or both.

 

Have A Question About This Topic?







Thank you! Oops!

Strategies For Managing Student Loan Debt

Five strategies for managing your student debt.

The Big Picture–Little Focus on Big Issues

If the stock market is hitting record highs, why aren’t money managers feeling the love?

Business Succession Planning Blueprint

Is succession a part of your strategic business plan? It should be.

View all articles

Taxable vs. Tax-Deferred Savings

Use this calculator to compare the future value of investments with different tax consequences.

My Retirement Savings

Estimate how long your retirement savings may last using various monthly cash flow rates.

What Is My Life Expectancy?

Estimate how many years you may need retirement assets or how long to provide income to a surviving spouse or children.

View all calculators

Principles of Preserving Wealth

How federal estate taxes work, plus estate management documents and tactics.

5 Smart Investing Principles

Principles that can help create a portfolio designed to pursue investment goals.

Protecting Those Who Matter Most

The importance of life insurance, how it works, and how much coverage you need.

View all presentations

What Can a Million Dollars Buy You?

$1 million in a diversified portfolio could help finance part of your retirement.

Are Alternative Investments Right for You?

With alternative investments, it’s critical to sort through the complexity.

Saving for College 101

Here’s a crash course on saving for college.

View all videos