How Much Money You Would Have If You Never Paid Taxes

You’re likely familiar with that disappointing moment that comes when you open your paycheck only to be reminded, once again, that however much you might be earning, Uncle Sam is taking a large slice of it. With so much of your hard-earned money disappearing before your eyes, it’s easy to fantasize about what it might be like if you could avoid paying taxes entirely and keep the whole check.

Of course, it’s just a fantasy — taxes are unavoidable. GoBankingRates looked at data from the Bureau of Labor Statistics for Americans in each of four different age groups to see just how much they are paying in taxes.

See how much more money you would have earned over the course of your working career, and learn exactly what is being deducted from each paycheck.

Last updated: April 30, 2021

• 2019 income before personal taxes: $76,187
• 2019 income after personal taxes: $67,887
• Difference: $8,300
• 10-year accumulation: $83,000

The 25-34 age bracket includes many recent college graduates who have the lowest average income of any age group. Many people in their late 20s and early 30s are going to be struggling with student loans, so paying a big tax bill rather than student loan debt is likely to sting a bit.

• Annual property taxes: $1,149
• 10-year accumulation: $11,490

Although millennials have typically been waiting until later in life to purchase homes, there’s still plenty who are likely to start having to pay property taxes before they turn 35. Home ownership has plenty of benefits, but property taxes clearly aren’t one of them. The $11,490 you’ll pay over the course of a decade could potentially feed a family of four for a full calendar year.

• Annual federal income taxes: $6,039
• 10-year accumulation: $60,390

Federal taxes are usually going to take the biggest bite out of your paycheck, and that’s still true even when you’re young. By the end of 10 years, your tax bill just for federal income taxes will almost be equivalent to your full year’s take-home pay during this period.

• Annual state and local income taxes: $2,211
• 10-year accumulation: $22,110

State and local taxes are typically much lower than at the federal level, especially for people in lower income brackets. That said, it’s still clearly taking a significant bite out of your budget. Between the ages of 25 and 35, you’re likely to pay over $20,000 in income taxes to your state and municipality — enough to buy a new car (provided you’re OK with a relatively modest sedan).

• 2019 income before personal taxes: $103,272
• 2019 income after personal taxes: $89,486
• Difference: $13,786
• 10-year accumulation: $137,860

Your mid-30s to your mid-40s is typically an important time in your life. You’re likely advancing in your career and your income is rising to reflect that, but you’re also probably taking on a raft of new financial responsibilities, like starting a family and owning a home. Unfortunately, even though you have a lot of important new things to spend that money on, making more money also translates to paying more in taxes — close to double what you shelled out during the previous decade of your life.

• Annual property taxes: $2,256
• 10-year accumulation: $22,560

Owning property is a big step in anyone’s life, and spending your hard-earned dollars on home equity rather than rent is something that can pay big dividends in the long term. It does, however, mean paying property taxes, which means yet another bite out of your annual income, and over $20,000 by your mid-40s. Given that the average down payment on a house is 11%, the typical property tax bill for this portion of your life comes to more than the average down payment on a $180,000 house.

• Annual federal income taxes: $10,396
• 10-year accumulation: $103,960

Earning enough to push you into a higher tax bracket will mean paying at a higher rate, which will mean a big chunk of your salary winds up going to the Federal Government. Over the course of 10 years, you’ll send a cool six figures to Uncle Sam, almost double the median annual salary in America.

• Annual state and local income taxes: $3,353
• 10-year accumulation: $33,530

Being in a higher tax bracket usually means a significantly higher tax burden at the state and local level, too. You’ll spend about another $1,000 a year in your mid-30s to mid-40s than the previous decade of your life. That can add up, with the $33,530 tax bill coming to more than it would cost you to rent a one-bedroom apartment for a year in D.C., Chicago or Los Angeles.

• 2019 income before personal taxes: $107,094
• 2019 income after personal taxes: $91,384
• Difference: $15,710
• 10-year accumulation: $157,100

During a time in your life when you’re likely to begin sending kids to college and thinking seriously about retirement, you also hit the highest average rate of taxation. That $157,100 over a decade winds up being more than enough to cover the average cost of four years of in-state tuition at a public university for four different kids.

• Annual property taxes: $2,801
• 10-year accumulation: $28,010

While the increase isn’t as steep as it was for the 35-44 age group, you can still expect to see your property tax burden climb in your middle age. Ultimately, you’ll wind up shelling out nearly $30,000 to pay property taxes during these 10 years of your life.

• Annual federal income taxes: $12,203
• 10-year accumulation: $122,030

Your 10-year tax bill just for the federal government during your prime earning years will come to over $122,000.

• Annual state and local income taxes: $3,404
• 10-year accumulation: $34,040

Ten years of state and local taxes would more than cover the cost of 39 shares of stock in Tesla, which could very well be a wise investment for someone beginning to stare down retirement.

• 2019 income before personal taxes: $99,606
• 2019 income after personal taxes: $81,865
• Difference: $17,741
• 10-year accumulation: $177,410

In the final decade before retirement, you’ve left your prime earning years, and plenty of people are even finding ways to retire early. But this can be a crucial time to put away cash so that you can live happily and healthily after you stop working.

However, according to a report issued by the United States Government Accountability Office, the average American 55-year-old has only around $104,000 saved for retirement, which isn’t even enough to cover their projected tax bill over the next 10 years of their life.

• Annual property taxes: $2,659
• 10-year accumulation: $26,590

Over $26,000 is a pretty steep bill, especially when you consider that, if you’re retiring this year and took home an average salary, a full year of Social Security benefits is less than $20,000.

• Annual federal income taxes: $14,174
• 10-year accumulation: $141,740

Paying your federal income taxes might hurt a little bit less as you fast approach the age where you can finally take advantage of Social Security and Medicare. On the other hand, forking over $140,000 is never easy.

• Annual state and local income taxes: $3,466
• 10-year accumulation: $34,660

You’ll likely pay over $34,000 in state and local income taxes alone in the final 10 years before you retire. At a time when you may be thinking about what you can pass along to your family, that can be a hard hit to absorb.

All told, taxes end up taking up a big portion of your annual income. Here’s the total bill for your career, from a spry, young age of 25 to the eve of your retirement at 64:

• Total personal tax bill 25-64: $553,370
• Total property tax bill 25-64: $88,650
• Total federal income tax bill: $428,120
• Total state and local income tax bill: $124,340

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GOBankingRates analyzed data from the Bureau of Labor Statistics’ 2019 Consumer Expenditure Survey data to find how much money the average concumer unit loses to taxes over a lifetime. Looking at (1) annual income before taxes, (2) annual income after taxes, (3) the annual difference in income, (4) annual property taxes, (5) annual federal income taxes and (6) annual state and local income taxes for four consumer age groups, GOBankingRates was able to calculate the total amount a typical consumer in each age group loses to each kind of tax in a year. The age groups considered were as follows: 25-34, 35-44, 45-54 and 55-64. Multiplying the annual amount paid in each kind of tax by 10 allowed GOBankingRates to calculate the total accumulated loss in income to taxes for the entire period represented by each age group, and adding these cumulative losses created estimates for the lifetime total paid in each kind of tax. All data was collected on and up to date as of Jan. 19, 2021.