wangchieh[at]wongfaye.com wrote:

- quote -

No. This is for *taxable* income. Taxable income is after
you deduct either your itemized deductions or your standard
deduction for the status (single or Married filing jointly,
etc.) plus your deductions for your exemptions and
dependents (how many people you claim).

Missy Doyle

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- quote -

NO

If you make $74,199, the income between $30,650 and $74,200
is $43,550. 25% of 43,550 is $10,887.50 plus $4,220 equals
$15,107.50.

If you make $74,201, the income between $74,200 and $154,800
is $1. 28% of $1 is $0.28 plus $15,107.50 is $15,107.78.

Dennis

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wangchieh[at]wongfaye.com wrote:

- quote -

No. For two reasons.

1) The tax rate applies to "taxable income" rather than
"gross income", so there are the effects of (for federal
taxes) personal exemptions and either standard or itemized
deductions.

2) The tax rate only applies to the amounts inside the
brackets.

But let's assume that your example of $74,199 is taxable
income and apply the table rules as follows:

74,199 is in the 25% bracket.
Compute 25% of the amount (74,199 - 30,650 = 43,549).
25% of 43,549 = $10,887
Add the additional 4,220 to get a total of $15,107.

You subtract the lower bound because the 25% rate only
applies to income those amounts. The additional amount that
you add is the tax for the income that is less than the
bottom of the taxable income range.

The problem in your calculation was not subtracting the
bottom of the range.

An easy check, and the reason I knew immediately that your
answer was too high is that the top of the previous bracket
in the table should be very close to the amount that gets
added in the next bracket up. I therefore expected a result
close to $15,107.50

- quote -

No. The answer is actually $15,107.78

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wangchieh[at]wongfaye.com writes:

- quote -

It means that if you have $79,199 in taxable income
that you pay:
$4220 + .25*($74199 - $30650)
= $4220 + .25 * $43549
= $4220 + $10887
= $15107
- quote -

It means that if you have $74201 in taxable income
that you pay:
$15107 + 0.28*($74201 - $74200)
= $15107 + 0.28 * $1
= $15107 + $0 [$0.28 rounds down to $0)]
= $15107

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

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wangchieh[at]wongfaye.com wrote:

- quote -

No.

If the income is $74,199, first you subtract $30,650, then
multiply by 25%:

74199 - 30650 = 43549 x .25 = 10887.25

10887.25 + 4220 = 15107.25

- quote -

No.

If the income is $74,201, first you subtract $74,200, then
multiply by 28%:

74201 - 74200 = 1 x .28 = .28

15107.5 + .28 = 15107.78

--
D.F. Manno | dfmanno[at]mail.com
Now this is not the end. It is not even the beginning of the
end. But it is, perhaps, the end of the beginning. * Winston
Churchill

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wangchieh[at]wongfaye.com wrote:

- quote -

No. Based on the data you provided the tax on $74,199 is:
$4220.00 + .25 * ($74199 - $30,650) = $15,107.25

- quote -

No. Based on the data you provided the tax on $74,201 is:
$15,107.50 + .28 * ($74,201 - $74,200) = $15,107.78.

For the additional $2 in income you will owe an additional
$0.53 in taxes, which, by the way, turns out to be 26.5% of
the additional $2.

--
Vic Roberts
Replace xxx with vdr in e-mail address.

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wangchieh[at]wongfaye.com wrote:

- quote -

Here's the complete list for single filers that you pulled
from. It's easier to see the progression if you start from
the bottom (which would mean the top in this case).

10% on income between $0 and $7,550
15% on the income between $7,551 and $30,650; /plus/ $755.00
25% on the income between $30,651 and $74,200; /plus/ $4,220.00
28% on the income between $74,201 and $154,800; /plus/ $15,107.50
33% on the income between $154,801 and $336,550; /plus/ $37,675.50
35% on the income over $336,551; /plus/ $97,653.00

Look at the 15% bracket. The $755 added is because you maxed
out on the 10% bracket at $7,550. You owe 10% of the first
$7,550 and 15% of the amount over that up to $30,650, and so
on. So for income of $12,550, you'd owe 10% of $7,550 plus
15% of $5,000, or $755 + $750 = $1,505.

--
Blake Krass
bkrass[at]email.com

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wangchieh[at]wongfaye.com posted:

- quote -

No. If you read it properly, it says you should calculate
25% of your income in excess of $30,650 and _add_ the result
to the $4220 tax due on the initial $30,650. (25% X $43,549
= $10,887 + $4220 = $15,107.)

- quote -

Here again, you use the same formula, but since the total
has moved to the "next bracket" and happens to be
_effectively_ the same as the minimum number in that bracket
(28% of $1 is 28 cents), which would make your tax due
$15,107.78 -- which turns out to be the same result, because
of rounding -- or $15,108.

Bill

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wangchieh[at]wongfaye.com wrote:

- quote -

No, tax is approx. $15,107 (Tax Table amount is slightly
different, and will be used if taxable income is <$100,000).

- quote -

No, tax is approx. $15,108.

Read the instruction CAREFULLY.

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<wangchieh[at]wongfaye.com> wrote:

- quote -

No.

- quote -

No.

Where do you get those numbers from? Show your calculations.

Seth

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- quote -

No, it doesn't mean that. You are misreading the
instructions for calculating the tax. You applied the
percentage to the entire amount of income, instead of to
only the amount by which the income exceeds the low end of
the bracket. Your wording, "the income between . . .," may
be confusing you. The more usual wording, as follows, might
be clearer. For example:

"If taxable income is over $30,650 but not over $74,200, the
tax is $4,220 plus 25% of the amount over $30,650."

So for income of $74,199, you first subtract $30,650 from
the total income of $74,199, which leaves $43,549. Then take
25% of $43,549, which is $10,887.25. Finally add $4,220,
giving a tax of $15,107.25. Putting it in a formula, it's:

4220 + (25% x (74199 - 30650)) = $15,107.25

Similarly, for income of $74,201 the calculation is:

15107.50 + (28% x (74201 - 74200) = $15,107.78

Bob Sandler

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wangchieh[at]wongfaye.com wrote:

- quote -

First, that isn't exactly what it says. What it says is if
your taxable income is between $30,650 and $74,200 then your
tax is $4,220 + 25% of the excess over $30,650.

- quote -

No. More like $15,107.

- quote -

No. More like $15,108.

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wangchieh[at]wongfaye.com wrote:

- quote -

The tax on $30,650 is $4220 plus 25% of any amount over the
$30,650. This adds up to $15107.50 at $74,200 taxable, at
which point each dollar is taxed at 28%.

http://www.fairmark.com/refrence/2006reference.htm
provides a nice chart showing this.

JOE
JoeTaxpayer.com

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wangchieh[at]wongfaye.com wrote:

- quote -

We have a graduated tax system. When you reach a level over
which there would be no tax on your income, income above
that level is taxed at a higher rate. When you reach the
next level, the income within that new level is taxed at a
higher rate. Your income is taxed at rates established
AFTER deductions for your exemptions and deductions. There
are also credits which can reduce your taxes. There is what
is called an Alternative Minimum Tax which can impact on
what you pay (depending on your income, exemptions, and
deductions). Here are the 2006 Tax Rate Schedules:

http://www.irs.gov/formspubs/article...150856,00.html

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The 2006 tax brackets state the following:

Tax is 25% on the income between $30,650 and $74,200; plus
$4,220.00

Tax is 28% on the income between $74,200 and $154,800; plus
$15,107.50

Questions:

1. Does this mean if I make $74,199 that I will have to pay
$22,769 in taxes?

2. Does this mean if I make $74,201 that I will have to pay
$35,883 in taxes?

Sorry for my ignorance. I appreciate any answers I can get.

Thanks!!!

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