Frustrated taxpayers dutifully completing their 1040s frequently ask themselves an understandable question: Where is all this money going? And they deserve an answer.

The federal government is projected to spend $21,671 per household in 2004 -- the most since World War II and $3,500 more than in 2001. Tax revenues will reach $16,981 per household through a combination of the income tax, payroll tax, gas tax, estate tax and assorted business taxes typically passed on through higher prices and smaller investment returns. The remaining $4,690 represents the deficit per household, which will be dumped in the laps of our children.

Here is a breakdown of where that $21,671 goes:

Social Security and Medicare: $7,165. The 15.3 percent payroll tax, split evenly between the employer and employee, covers most of these costs. Contrary to popular belief, individuals' contributions are not set aside for their own retirement, but used to fund the benefits of current retirees. Although there were once 15 workers per retiree, the retirement of the baby boomers will leave only two workers to fund the benefits of each retiree. By 2030, the added costs of that burden are projected to reach what, in today's economy, would be $5,200 per household. In 2050, that additional tax would climb to $13,500 per household. The unpredictable costs of the new Medicare drug benefit could add thousands more to each household's tax bill.

Defense: $4,240. The defense budget covers everything from military salaries, to operations in Iraq and Afghanistan, to the research, development and acquisition of new technologies. Lawmakers drastically cut defense spending throughout the 1990s. The 9/11 attacks reversed this trend, and the $1,300 per household increase since 2001 has returned defense spending to its historical levels.

Low-income programs: $3,479. Nearly half of this spending subsidizes state Medicaid programs that provide health services to poor families. In line with economy-wide health-care trends, Medicaid costs are rising 10 percent per year. Other low-income spending includes: Temporary Assistance for Needy Families (TANF), food stamps, housing subsidies, child-care subsidies, Supplemental Security Income (SSI), and low-income tax credits.

Interest on the federal debt: $1,460. Washington is $7 trillion in debt. It owes $4 trillion to the public that owns its bonds and the rest to other federal agencies. Record-low interest rates have reduced the interest payments by $1,000 per household over the last six years. As interest rates climb back to normal levels, so will these costs to taxpayers.

Federal employee retirement benefits: $835. This funds the retirement and disability benefits of federal employees, including the military. Interest from federal trust funds covers part of this spending.

Health research and regulation: $619. Health-research spending has doubled since 1998, and nearly all of that spending growth has been concentrated in the National Institute of Health. This category also includes the Food and Drug Administration and dozens of grant programs for health providers.

Education: $583. Primarily a state and local function, 8 percent of education spending comes from Washington. Federal education spending has surged 76 percent since the 2001 enactment of the No Child Left Behind Act. Most federal dollars go to low-income school districts, special education and college student financial aid.

Veterans benefits: $565. The federal government provides income and health benefits to veterans. Spending is up 34 percent since 2001.

Unemployment benefits: $451. Unemployment costs fluctuate based on the number of unemployed Americans. Recent costs have ranged between $220 per household in 2000 (when unemployment was low) and $526 per household in 2003 (when unemployment was higher). This year, unemployment costs are decreasing as job growth continues.

Highways and mass transit: $400. Most highway and mass transit spending is financed by the 18.4 cent per-gallon federal gas tax. Per-household costs have increased from $254 in 1998 to $400 this year, and the current highway reauthorization bill in Congress would boost them substantially.

Justice administration: $389. Justice spending includes federal attorneys and prisons, as well as law enforcement grant programs. New homeland security costs have added $100 per household to justice spending.

International affairs: $320. This includes foreign economic and military assistance, operation of American embassies abroad, and contributions to organizations such as the United Nations. International spending has doubled since 9/11.

The programs listed above cover $20,506 per household. The remaining $1,165 is allocated to all other federal programs, including farm subsidies, environmental programs, space exploration, air transportation and community development.

Taxpayers themselves will have to answer a final question: Are they getting their money's worth?

Brian Riedl is Grover M. Hermann Fellow in Federal Budgetary Affairs in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.