Capitol Hill Loves Taxes!!

Capitol Hill Loves Taxes!!

Did you know that our tax system uses what’s called a Progressive Tax? Your individual income is taxed using graduated rates, as opposed to taxing all of your income at one level. It’s progressive in that it tries to tax rich people (who have more income) at a higher rate; and poor people (those with less income) at lower tax rates.

For example, the rates for 2008 for those filing Married Filing Jointly are as follows:
10% on the income between $0 and $16,050
15% on the income between $16,050 and $65,100; plus $1,605.00
25% on the income between $65,100 and $131,450; plus $8,962.50
28% on the income between $131,450 and $200,300; plus $25,550.00
33% on the income between $200,300 and $357,700; plus $44,828.00
35% on the income over $357,700; plus $96,770.00

So, as seen above, only the first $16k of your income will be taxed at the 10% rate. And every other married couple in America will also have the first $16k of their income taxed at 10%. Then your income will be taxed as you move up from there.  It’s actually more complicated than this, but this is a good start.

Now you know – go conquer the world.

Thanks, Jason M. Blumer

IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that (i) any U.S. tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code; (ii) any such tax advice is written in connection with the promotion or marketing of the matters addressed; and (iii) if you are not the original addressee of this communication, you should seek advice based on your particular circumstances from an independent advisor.

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