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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16547
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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Is the new tax rate of 39.6% based upon your total income if

Customer Question

Is the new tax rate of 39.6% based upon your total income if you earn 400,000 as an individual or does the new tax rate apply to just the amount over 400,000?
Submitted: 3 years ago.
Category: Tax
Expert:  Megan C replied 3 years ago.

Thanks for asking your question! I'm sorry to hear about your tax issue and I'm going to try my best to help you understand or resolve it.

Thank you for your question and thank you for using JustAnswer.com. The 39.6% tax rate is only on your income above $390,050. It is not levied on your entire income. Our income tax system is progressive, meaning you slowly increase the amount of tax you pay the more you make.

Please let me know if this is unclear. You can CLICK HERE to see the tax brackets for 2013.


Thank you again for using our service. Have a happy, and safe, 2013.

 

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You should be aware that your question, as with most tax questions, can never really be answered completely...addressing all the permutations; that is because of the many assumptions that have to be made I have done my best to determine what I think you are asking and answering it in the most direct and understandable manner possible. If, however, after reviewing the questions, you have any uncertainties or further questions, please do not hesitate to ask.

Customer: replied 3 years ago.

So if my adusted gross income is $500,000 and I am single, my tax rate would be based on the tax table in increments? And only the 100,000 would be taxed at 39.6%?

Expert:  Megan C replied 3 years ago.
You are correct. You would be taxed based on the increments, and only the amount above $390,050 would be taxed at 39.6%.

Please let me know if you need anything additional. Thanks for using JustAnswer.com and have a happy, and safe 2013.

** Please take a moment to rate my response as "Excellent" so that I may be compensated for assisting you today. Please let me know if my assistance was anything less than "OK Service", as I am compensated based on whether or not I have assisted you with your issue. If you need further clarifications, PLEASE WAIT TO RATE MY ANSWER UNTIL AFTER RECEIVING FOLLOW UP FROM ME. If I receive anything less than OK Service, I do not get paid. Thank you for your kind understanding in this matter. If you have difficulties rating, then simply respond stating that you are having difficulties rating and thank me for my excellent, good, or ok service and we can get the rating applied by the site*
Expert:  Megan C replied 3 years ago.
Thanks for allowing me the opportunity to help you. Please let me know if I can be of any further assistance to you in this matter. Also if you ever need anything else in the future please Simply enter "MyVirtualCPA" in the subject of your question Thanks again for being a JustAnswer customer
Expert:  Megan C replied 3 years ago.
Thanks for allowing me the opportunity to help you. Please let me know if I can be of any further assistance to you in this matter. Also if you ever need anything else in the future please Simply enter "MyVirtualCPA" in the subject of your question Thanks again for being a JustAnswer customer