7. How tax is calculated on your Taxable income
Example
Your gross income = $126,000
Your deduction = $ 6,000
Taxable income = $120,000
Tax Brackets
(individual taxpayer)
to $9,225
9,226 to
$37,450
37,451
$90,750
90,751
$189,300
189,301
$411,500
411,501
to $413,200
More than $413,200
Applicable to you
$9,225
= 9225
= 28225
= 53300
$120,000
= 29250
Tax Rates
10%
15%
25%
28%
33%
35%
39.6%
Calculation for
Tax within
Tax Bracket
x 10%
x 15%
x 25%
x 28%
Calculated
tax bracket
923
Tax
(on your taxable income)
$ 26,671