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022 - How Does Our Tax System Work?
Published 6 years, 6 months ago
Description
- Progressive tax bracket
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- Everyone pays $1,905 on first $19,050 of taxable
- $140k taxes at $400k?
- 35% tax bracket
- Actual taxes = $91,379 (22.8% taxes)
| Tax Rate | Taxable Income Bracket | |
| 10% | $0 to $19,050 | |
| 12% | $19,051 to $77,400 | |
| 22% | $77,401 to $165,000 | |
| 24% | $165,001 to $315,000 | |
| 32% | $315,001 to $400,000 | |
| 35% | $400,001 to $600,000 | |
| 37% | $600,001 or more |
- Deductions
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- Standard deduction - $24,400
- Itemized - mortgage interest, state/local taxes, charitable giving, medical expenses over 7.5% of AGI
- Other considerations
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- States have separate tax brackets too
- Social Security @ 6.2% up to $132,900; Medicare @ 1.45% not capped
- Different types of taxes for earned income, capital gains, dividends
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LET'S CONNECT!
James
Scott
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