2. Tax Brackets

Front

What is a tax bracket?

Back

A tax bracket is a range of income that is taxed at a specific rate. As income increases, it may fall into higher tax brackets, resulting in a higher tax rate applied to the income within that bracket.

Front

How does marital status affect tax rates?

Back

Marital status affects tax rates because married couples filing jointly may have different tax brackets and rates compared to single filers, often resulting in lower overall taxes.

Front

What is the federal tax rate for income over $1,000,000?

Back

The federal tax rate for income over $1,000,000 is 37%.

Front

Calculate the federal tax for an income of $82,500.

Back

$6,136.

Front

What is the federal tax owed by someone earning $42,000?

Back

$3,158.

Front

What is the total tax due for an income of $95,000?

Back

$13,160.50.

Front

True or False: Your income level determines your tax bracket.

Back

True.

Front

What is the purpose of tax brackets?

Back

Tax brackets are designed to ensure that individuals with higher incomes pay a higher percentage of their income in taxes.

Front

What is the tax rate for the lowest income bracket?

Back

The tax rate for the lowest income bracket is typically 10%.

Front

How do deductions affect taxable income?

Back

Deductions reduce the amount of income that is subject to tax, potentially lowering the overall tax owed.