I am studying taxes in my college class. When I get to the tax bracket parts, I cannot understand my textbook at all. Can someone explain it as simple as possible?
Brackets: We have a graduated income tax rate in the USA. The first a dollars you make are not taxed. The next b dollars are taxed at 10%, the next c at 15%, the next d at 25%, the next e at 28%, the next f at 33%, the next g at 35%. The actual dollar amounts (they vary based upon filing status) are the brackets. Those percentages are the rates. Whatever you would pay on your next dollar of income is the marginal tax rate. So, if I'm in the 15% tax bracket, I earn an extra dollar, my tax (theoretically) goes up 15 cents, so my marginal tax rate is 15%. _
What would not make experience? while you're already $a million into the 15% bracket, your next dollar would be taxed at 15%. So will the subsequent $a million while you're $322 below the rollover element for the 25% bracket or $3,589 into the 15% bracket. Your marginal fee is anyplace your next dollar of income falls. it could in straightforward terms be on the coolest element at which a greater physically powerful fee applies for a tiny fraction of taxpayers yet it relatively is unquestionably beside the point to the belief.
