Your federal taxes consist of federal income tax and FICA tax (or SECA self-employment tax for self-employed individuals).

FICA (Federal Insurance Contributions Act) tax is a payroll (or employment) tax imposed equally on both employees and employers to fund Social Security and Medicare. Your personal federal tax burden includes only your (employee) share, or 1/2 of your FICA total.

Income tax liability amounts can be found on your annual tax return. FICA witholding can be found on your W2 (as Social Security and Medicare witholding) or year-end paycheck stub. SECA (Self-Employment Contributions Act) self-employment tax amounts are calculated in your annual tax return.
Below are representative examples of typical tax liability (income tax and FICA) for families and individuals in a variety of income and demographic groups, from the Tax Policy Center †

Single:

Single, two children:

Married, no children:

Married, two children:

Married, one child in college:

Retired couple:

* No net tax liability—income tax credits exceed FICA taxes paid.
† Calculated using: 2011 tax year; Obama-GOP Plan; AMT Patched.

The online Your Federal Tax Receipt calculator is based on a proposal in a Third Way idea brief, A Taxpayer Receipt.

The most recent data for this receipt is 2011. For a more current tax receipt, please visit the White House tax receipt calculator.

Each line in the receipt shows how much a taxpayer spent on that item. The amount is calculated by first determining how much the federal government spent for that item. Next, the federal spending for that item is calculated as a percentage of total federal spending. Finally, the percentage for each item is multiplied by the taxes paid to provide the amount the taxpayer spent on each item.

For example, the amount of money spent on Medicare in fiscal year 2010 was $457 billion, which is then divided by total federal spending of $3.72 trillion. This means that 12.3 % of all federal spending went to Medicare. Multiply this number by the amount paid in taxes ($4,588 for a median income household) and that means this family paid $564 for Medicare.

The Tax Receipt is based on federal budget outlay data from the Budget of the United States Government: Public Budget Database Fiscal Year 2013. Some specific items, such as Head Start, are not included in the federal budget data. Instead, such budget data comes from reports published by federal agencies. Please note that more current information about some budget items such as interest payments on the national debt is available throughout the year, but those amounts are not included. That way, the calculations for the receipt remain consistent with the total spending shown in the federal budget for that year.

The budget data has been recategorized to use terms that are more familiar to taxpayers. For example, instead of the Bureau of Reclamation as shown in the budget data, the taxpayer receipt shows that amount as part of dams, power plants, and reservoirs. Because some items remain obscure, the receipt provides a link to more information about an item. In some instances, the link goes directly to a federal agency. In other cases, it goes to a Google search using the relevant search terms.

The budget data includes many items called “undistributed offsetting receipts.” These items include a variety of items such as interest on federal trust funds such as Social Security, income from off-shore drilling, and federal agency contributions to pension funds. These items have been assigned to the related receipt categories.

The national debt number for the receipt is calculated using a different methodology. It is not adjusted for the amount of taxes paid, but instead is based on the amount the federal government owes per legal resident. The data sources are: Department of Treasury; 2010 Census Report; and Department of Homeland Security

You can request a complete accounting of our interpretation of the budget and debt data from: contact@thirdway.org

For more background, see Third Way’s report, A Taxpayer Receipt.