2007-01-19 14:18:34 · 10 answers · asked by William W 1 in Business & Finance ➔ Taxes ➔ United States
No, only the amount over where the higher bracket kicks in. Let's say it's 10% of the first $25K. And 20% of the next $25K. When you go from making $25K to $35K, you go from paying $2,500 in tax to paying $4,500 in tax. (10% X $25K = $2500 + 20% X $10K = $2000)
2007-01-19 14:26:12 · answer #1 · answered by Byron W 3 · 1⤊ 0⤋
If you've jumped to a higher tax bracket, it is because you are earning more in wages. That total amount of earnings (after deductions, etc.) is now taxed at the higher brackets rate. So the answer would be yes, but don't forget, your earning more money now. That's always a good thing! Congratulations!!!
2007-01-19 14:26:24 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Ditto, just the portion subject to the higher tax bracket. Also, there are many ways of legally reducing your tax bill without breaking any tax laws, however, it's more difficult to find the loopholes as an employee. This is why employees tend to pay majority of the taxes in any industrialized country.
2007-01-19 14:24:27 · answer #3 · answered by Muga Wa Kabbz 5 · 0⤊ 1⤋
No just the portion that is within the higher tax bracket.
2007-01-19 14:21:27 · answer #4 · answered by ANISE 4 · 1⤊ 0⤋
topgunpilot22 and stingray are totally wrong on this. It's only the part that's over that bracket limit that gets taxed at the higher rate.
2007-01-19 14:43:21 · answer #5 · answered by Judy 7 · 1⤊ 0⤋
No it will not. We have a graduated tax system in which only the portion of your income in the new tax bracket would be taxed at the new rate. This rate is called your marginal tax rate. This is the rate that each additional dollar of income will be taxed at. However, your effective rate will be much lower than your marginal rate since our system is graduated. Your effective rate is your TOTAL TAX divided by your TOTAL TAXABLE INCOME.
2007-01-19 14:34:37 · answer #6 · answered by Homeslice 4 · 1⤊ 0⤋
The US operates under a graduated tax system.
It is hard to visualize it if you only look up the amount due in the tax tables, but it is there.
If you go all the way to the end of the tax table, it shows you how to figure your income taxes if your income is above a certain amount and it shows you part of the graduated scale.
2007-01-19 14:34:54 · answer #7 · answered by Gem 7 · 1⤊ 0⤋
NO. Just the amount over the new tax bracket.
2007-01-19 14:23:25 · answer #8 · answered by Brick 5 · 1⤊ 0⤋
Ok first of everyone here telling you no, doesn't know what they are talking about. When you go to the higher bracket that percentage is applied to your whole earnings not just the part over the bracket.
2007-01-19 14:28:01 · answer #9 · answered by StingRay 3 · 0⤊ 3⤋
yes
2007-01-19 14:23:00 · answer #10 · answered by topgunpilot22 4 · 0⤊ 3⤋