28% tax bracket


N

ned72

While speaking to a neighbor about pay
ing Federal income tax, he mentioned that his CPA had told him he was in
the 28% bracket. This surprised me so I looked at my tax return (that I
prepare myself) and when I compare the tax for the year with the
adjusted gross income, it was about 15% when compared to the taxable
income, it was about 19%. I'm curious what the CPA was talking about --
would it be the ratio of the tax owed to the Adjusted Gross Income,the
ratio of the tax owed to the taxable amount, or what??

Anyone have an ideal???
 
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P

Paul Maffia

While speaking to a neighbor about pay
ing Federal income tax, he mentioned that his CPA had told him he was in
the 28% bracket. This surprised me so I looked at my tax return (that I
prepare myself) and when I compare the tax for the year with the
adjusted gross income, it was about 15% when compared to the taxable
income, it was about 19%. I'm curious what the CPA was talking about --
would it be the ratio of the tax owed to the Adjusted Gross Income,the
ratio of the tax owed to the taxable amount, or what??

Anyone have an ideal???
Yes! The CPA was telling him his marginal tax rate was 28%. For a person
filing as a single that would be taxable income between $71,950 and
$150,150; for married filing jointly it is between $119,950 and $182,800;
married filing separately $59,975 and $91,400; head of household between
$102,800 and $166,450.
 
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J

Jim Kingdon

Yes! The CPA was telling him his marginal tax rate was 28%.

"Marginal" means "if you earn $1 more income, what percent of that
additional dollar is taxed?"

That's a computation of an average tax rate, not a marginal tax rate.
 

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