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View Diary: Do YOU understand how tax brackets work??? (124 comments)

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  •  Questions (0+ / 0-)

    How did you arrive at the $9500 figure as the minimum amount of exemptions - is that the minimum claim amount?  And the $91K for the family of 3 would be a "household income" tabulation, correct?

    I guess what I would say to the adjustments to your example is, the savings you earn by a marginal rate reduction is dependent on how much income you have accrued within that range.  That's true that a typical person with $50K in taxable income will likely have a gross income a fair bit higher than that - for somebody who's making a salary in the 70-80K (comfortable but still distinctly middle-class), the advantage per percentage-point reduction would be considerably higher.

    There's a lot of great info in that post - much appreciated.

    •  Sorry to get back to you late (0+ / 0-)

      I'm still "recovering" from excessive T-day frivolity and exuberance...

      This:

      she or he would get to subtract at least $9,500 of exemptions and deductions
      Comes from a personal exemption of $3700 and standard deduction of $5,800.  There may be very unique situations that may not get to use those but for nearly all single status filers at that income level that is what they get to use.  If you download the 1040 form from the IRS you will see those on lines 40 and 42.

      The $91k is for married filing jointly so it definitely includes all income of both spouses.  But it is more complicated and I was assuming a family with one child who is not working.  For any dependent children with income I am uncertain about the law.  There are rules and limits about declaring a child as a dependent on one's form.  And then if the child has significant income she or he may have to file a separate form.  Even so, I believe the child could still be considered a dependent based on age...  I don't know this part of the tax code though since I haven't needed it.

      I'm glad if my little writeup helped.

      Happy holidays.

      I'm not liberal. I'm actually just anti-evil, OK? - Elon James White

      by Satya1 on Sun Nov 25, 2012 at 09:46:32 AM PST

      [ Parent ]

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