November 27, 2019
022 – How Does Our Tax System Work?
- Progressive tax bracket
-
- Everyone pays $1,905 on first $19,050 of taxable
- $140k taxes at $400k?
- 35% tax bracket
- Actual taxes = $91,379 (22.8% taxes)
|
Tax Rate |
Taxable Income Bracket |
|
|
10% |
$0 to $19,050 |
|
|
12% |
$19,051 to $77,400 |
|
|
22% |
$77,401 to $165,000 |
|
|
24% |
$165,001 to $315,000 |
|
|
32% |
$315,001 to $400,000 |
|
|
35% |
$400,001 to $600,000 |
|
|
37% |
$600,001 or more |
- Deductions
-
- Standard deduction – $24,400
- Itemized – mortgage interest, state/local taxes, charitable giving, medical expenses over 7.5% of AGI
- Other considerations
-
-
- States have separate tax brackets too
- Social Security @ 6.2% up to $132,900; Medicare @ 1.45% not capped
- Different types of taxes for earned income, capital gains, dividends
-
LET’S CONNECT!
James
Scott
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