You probably know how much you pay in taxes each year when you file your annual return and either (1) aren’t happy about how much you owe the IRS or (2) find yourself looking forward to a tax refund. But have you ever wondered about how all of those yearly payments add up over time?
A new analysis takes that long view, estimating that the average U.S. taxpayer will pay hundreds of thousands of dollars in federal, state, and local taxes over the course of their lives. The high six-figure total includes income taxes, property taxes, sales taxes, and vehicle-related taxes.
And depending on where you live, your lifetime tax bill could be hundreds of thousands of dollars higher, according to the study from fintech company Self Financial.
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These tax burden findings arrive amid rising frustration in the U.S. over high prices and lack of affordability, and as lawmakers in several states and Congress debate eliminating or reducing income taxes and, in some cases, property taxes.
Here’s more to know.
How much tax people pay in the U.S.
According to a recent analysis by Self Financial, the average American will pay an estimated $762,272 in total taxes over their lifetime. (Notably, that represents a 45.3% increase from the 2024 estimate of $524,625 in lifetime taxes.)
The study adds up various taxes Americans pay throughout life across several major categories:
- Federal and state income taxes
- Property taxes
- Sales taxes
- Vehicle-related taxes
As you might expect, income taxes make up the largest share of the lifetime tax burden. (The analysis estimates that the average U.S. taxpayer pays about $532,910 in federal and state income taxes over a lifetime.)
Property taxes add roughly more than $145,000 over a lifetime, according to the study.
- Then there are the taxes we often pay without thinking much about them: Sales taxes at the register and taxes tied to car ownership.
- For example, the study data show that “owning the most popular car (i.e., a Ford F-Series) will cost an additional $31,817 in tax payments.”
While these taxes might seem relatively small in any given transaction, over a lifetime, the average U.S. taxpayer will pay an estimated 33.6% of their earnings in taxes, according to the study.
Which states have the highest taxes
Where someone lives can impact their tax payments. However, when it comes to lifetime tax burden, the latest analysis reveals significant differences due to income levels, housing costs, tax structures, and spending patterns.
For example, residents of New Jersey face the highest estimated lifetime tax burden. The study projects Garden State residents will pay roughly $1.35 million in taxes over their lifetimes.
Other states with high lifetime tax burdens:
|
State |
Estimated lifetime taxes paid |
|
Massachusetts |
$1,297,130 |
|
Connecticut |
$1,249,749 |
|
New Hampshire |
$1,125,478 |
|
New York |
$1,084,561 |
At the other end of the ranking, Florida residents have the lowest estimated lifetime tax burden, at about $508,000, according to the study. The difference between the highest- and lowest-tax states exceeds $800,000 over a lifetime.
Note: The analysis estimated lifetime taxes by combining federal, state, local, property, sales, and vehicle-related taxes using median earnings, consumer spending, housing, and vehicle ownership data. Researchers assumed a typical working life from ages 22 to 67 and applied current tax rates and spending patterns over an average lifespan of 79.6 years.
Proposals to eliminate state income tax and property tax
This tax burden analysis comes as lawmakers nationwide advance tax cut proposals.
Several states have recently lowered income tax rates or adopted flat-tax systems, while others are debating further cuts to attract residents and businesses.
For example, in Missouri, voters will decide in August on Amendment 5, a measure that would phase out the state’s individual income tax.
- Supporters of eliminating the state’s income tax argue it would let residents keep more of their earnings.
- Some opponents warn that Missouri might need to rely more on other taxes, e.g., sales taxes, to make up for lost revenue and fund public services.
Property taxes have also become a major target in recent years, particularly in states where rising home values have pushed up tax bills.
As Kiplinger has reported, in Florida, lawmakers are considering a constitutional amendment that would increase the state’s homestead exemption for non-school property taxes to $250,000 in 2028 and beyond.
- Supporters of the proposal for November’s vote say it would help homeowners and gradually eliminate property taxes on homesteaded properties.
- Critics, however, are concerned about how local governments would replace lost revenue for essential services like public safety and infrastructure.
Several members of Congress have introduced plans to exempt certain income levels from federal income tax.
The Working Americans’ Tax Cut Act, proposed by Sen. Chris Van Hollen (D-Md.), would eliminate federal income taxes on the first $46,000 for individuals and $92,000 for couples while imposing a surtax on higher-income households.
Sen.Cory Booker’s (D-N.J.) “Keep Your Pay Act” would increase the standard deduction to effectively eliminate federal income taxes on the first $75,000 of earnings. However, neither has gained traction in Congress
For his part, President Donald Trump has floated eliminating income taxes (initially to be replaced with tariffs, many of which have since been struck down by the U.S. Supreme Court).
Also worth noting: Some users across social media platforms like Reddit, X, and TikTok have shared posts expressing support for tax resistance or a “tax strike” to stop paying taxes.
How to lower your taxes
To reduce your tax liability, it can help to plan for taxes that you can influence to some degree. However, each financial situation is unique, so consult a trusted tax advisor or financial planner for guidance.
Review your property tax bill.
Pay attention to other state and local taxes.
No-income tax states aren’t always the ones with the lowest overall tax burden. Sales taxes, gas taxes, vehicle fees, and other costs can sometimes offset income tax savings. So take all of these factors into consideration when deciding where to live.
Use available federal tax breaks.
You can lower taxable income by taking advantage of tax deductions and credits you’re eligible for, along with leveraging tax-advantaged accounts like HSAs and retirement savings accounts.
Plan for retirement taxes
Taxes don’t necessarily end in retirement due to income from required minimum distributions (RMDs), pensions, Social Security benefits, etc. Planning the timing of withdrawals and other income sources can help retirees manage tax burden.
Consider the tax impact of major financial decisions.
Remember that major life changes and financial decisions, from getting married or divorced to buying a home, changing jobs, having a child, or making certain investment moves, can affect tax liability.
Also, keep an eye on tax law changes.
With the November 2026 midterm elections approaching and special elections taking place across the country, voters in several states could have their say on major tax policy changes. Stay tuned.
