I earned $31,919 and I plan on taking the standard deduction of $5150. If I subtract the deduction from the income, won't that bump me into a lower tax bracket? Is that how it works? Thanks!!!
PS: On the W2 form, box #1 (wages, tips, other comp) is the yearly taxable income (before deductions) right?
2007-04-10 13:53:09 · 6 answers · asked by Mrmojo6068 3 in Business & Finance ➔ Taxes ➔ United States
Yes actually, your tax bracket is based on your highest dollar of taxable income. Taxable income is after deductions and adjustments and exemptions are subtracted.
2007-04-10 15:09:51 · answer #1 · answered by Judy 7 · 0⤊ 0⤋
After you deduct the standard deduction and personal exemption amount, you will be in the 15% tax bracket.
Box 1 is annual taxable wages. This box does not include any pre-tax amounts like 401(k) contributions or pre-tax health insurance.
http://www.irs.gov/formspubs/article/0,,id=150856,00.html
2007-04-10 22:55:21 · answer #2 · answered by tma 6 · 0⤊ 0⤋
After you deduct the standard deduction, you also have to subtract your exemption(s), which amounts to $3300 for yourself, spouse and all dependents. All that could bump you into a lower tax bracket
2007-04-10 13:58:40 · answer #3 · answered by Greg 3 · 0⤊ 0⤋
Nope. Based on how much you made.
The GROSS income before deductions.
After deductions, it is called your NET income.
right
Scratch that. My husband says you subtract the deductions, THEN find the tax bracket that you are in. Sorry. I haven't done our taxes in 20 years.
2007-04-10 13:56:01 · answer #4 · answered by pinkstealth 6 · 0⤊ 1⤋
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2016-10-18 00:32:49 · answer #5 · answered by ? 4 · 0⤊ 0⤋
No..your tax bracket in part... determines that deduction my friend
2007-04-10 13:56:11 · answer #6 · answered by Purple 4 · 0⤊ 2⤋