I read the tax brackets for 2013 and i was wondering, what tax does this refer to? is it just federal tax or does it include all the other little local/state taxes?for example, if a person who is Single earns $100,000, the tax bracket is 28% but someone I know who earns around that much gets more than 28% taken away. what are the other deductions?could someone please enlighten me?? thanks.
visit IRS and local library for dozens of books to explain taxes and how they are paid/collected. tax brackets are for federal, state and some cities. seen the books for 'deductions'
you are referring to income tax thee are other taxes withheld from your paycheck, ie SS and Medicare and a state employee tax if your state has one
First. FIT (Federal Income Tax) is what tax brackets usually refers to. There are a lot of other taxes and deductions that will be applied to the average paycheck. To figure out brackets, remember that each bracket applies to a different part of income. There is a base amount that is not taxed, followed by different ranges taxed at increasing rates. For single filers, it would go like this: First, deductions and exemptions are subtracted from gross income to arrive at taxable income. If taxable income is $100,000, the first 8,925 will be taxed at 10%, between 8,926 - 36,250 will be taxed at 15%, the amount from 36.251 - 87,850 will be taxed at 25% and the amount between 87,851 - 183,250 will be taxed at the 28% rate. That covers 100,000, so there is no need to calculate for higher tax rates in this example. So the effective tax rate (the percent that actually goes to tax) must be less than 28%, as most of the 100,000 will be taxed at less than 28% There are deductions other than FIT, however. 1) States can have state income tax which varies from state to state, so that is another tax deduction most states. 2) There are other incidental deductions at many jobs, including 401K contributions and insurance payments. These are usually optional and with different choices. 3) There is the FICA tax. That is the SS deduction of 6.2% and Medicare of 1.45% for a total of 7.65% although there are maximum amounts for the SS part of this deduction.
