Managing Your Money

Rich - or maybe not so rich?

Before the new tax laws were recently signed into effect, there was a lot of talk from President Obama and others about how taxes should only be raised but only for the "rich." According to Obama, "rich" was a married couple earning $250,000 per year or more.

However, all it would take to trip this barrier is two married professionals each earning $125,000. If you are in your 40s or so, this is not an outrageously high salary. And while there are plenty of people who would love to be making this kind of money, if you do earn $125,000 or more, you might not feel very "rich". After you pay the mortgage on a house in the suburbs and pay for a car or two and maybe some college tuition, there might not be much left over. So, what exactly might be considered rich?

According to the IRS, if your adjusted gross income (AGI) was $67,280 or more, you were in the top 25 percent of all taxpayers. If your AGI was $113,799 or higher, you were in the top 10 percent of taxpayers. How high was the AGI of the top 5% of taxpayers? Anything higher than $159,619. And what did it take to find yourself in the top 1 percent of all taxpayers? That was reserved for people with AGIs of $380,354 or higher.

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