Looking to buy

JMA · 11-25-2009, 11:52 PM

Some are not understanding federal tax properly. There are only 3 rates for most people. You pay 10% on the income up to $8,350, then you pay 15% on the income between 8,350 and 33,950, and then 25% on the income between 33,950 and 82,250. So getting a write off of $3000 will save you $750 if you make over 36,950 (33,950+3,000) and only slightly less if you make under that. The tables in the back of the 1040 forms show a different percentage for each income level because they don't go into this detail, because many people won't understand or calculate it properly. If you make 78k/yr and you can take off 3K in taxes, you'll save 25% of the 3K regardless of what your overall/average taxation rate is since that is just a mix/average of the 10%/15%/25% rates that are applied to different proportions of your income.

11-25-2009, 11:52 PM	#21 (permalink)
JMA Base Member Join Date: Nov 2009 Location: TX Posts: 5 Drives: 370Z Rep Power: 17	Some are not understanding federal tax properly. There are only 3 rates for most people. You pay 10% on the income up to $8,350, then you pay 15% on the income between 8,350 and 33,950, and then 25% on the income between 33,950 and 82,250. So getting a write off of $3000 will save you $750 if you make over 36,950 (33,950+3,000) and only slightly less if you make under that. The tables in the back of the 1040 forms show a different percentage for each income level because they don't go into this detail, because many people won't understand or calculate it properly. If you make 78k/yr and you can take off 3K in taxes, you'll save 25% of the 3K regardless of what your overall/average taxation rate is since that is just a mix/average of the 10%/15%/25% rates that are applied to different proportions of your income.