[OT] Tax Tiers

Jeff Schroeder jeff at zingstudios.com
Mon Sep 3 10:05:29 MDT 2007


Daniel asked:

> Does anyone know what the tax bracket tiers are?  Is it broken out by
> how much your earn or is it a combination of things (e.g. school
> loans, mortgage, charitable contributions)?

Yes.

How much you earn is obviously the biggest factor, but that income is 
adjusted by a number of things.  Interest earned on bank and savings 
accounts, profits from the sale of stock, gambling winnings (heh), and 
so forth are all added to your W-2 income.  Then you deduct things like 
mortgage interest, charitable contributions, property taxes, IRA 
contributions, health care expenses, business expenses, etc.

The resulting number is your taxable income: the all-important line 43 
on your 1040.  State and federal taxes are computed based on that 
number.

HTH,
Jeff
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