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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29656
Experience:  Taxes, Immigration, Labor Relations
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If my salary is moved into a higher tax bracket, will my entire

Customer Question

If my salary is moved into a higher tax bracket, will my entire salary be taxed at a higher rate
Submitted: 8 years ago.
Category: Tax
Expert:  Lev replied 8 years ago.

No - only part of your income that is above certain level will be taxed at higher rate - not entire income.

 

Tax brackets are depend on the filing status.

You may see applicable tax brackets and examples here - http://www.moneychimp.com/features/tax_brackets.htm

 

Let me know if you need help with extimating your tax liability or withholding.

 

Customer: replied 8 years ago.
why? and what formula is used to determine that? Which part of my salary would be taxed at a higher rate?
Expert:  Lev replied 8 years ago.

Your tax liability is calculated based on the taxable income.

(Taxable income) = (adjusted gross income) - (deductions)

 

See for instance tax schedule for 2008 in the instructions for the form 1040 - http://www.irs.gov/pub/irs-pdf/i1040.pdf - page 92.

 

Assuming - you are single with taxable income $50,000 - your tax liability will be $4,481.25 + 25% on the amount above $32,550

because your 25% tax bracket is started from $32,550.

 

If your income is $100,000 - - your tax liability will be 16,056.25 + 28%

on the amount above $78,850

because your 28% tax bracket is started from $78,850.

 

 

 

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