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jekola451
New Member

Does it make sense that a one time increase of $50,000 in taxable income, under $200,000, results in $10,000 more in tax?

The increase was the results of an out of court settlement in a land sale dispute.
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1 Reply
MaryK4
Expert Alumni

Does it make sense that a one time increase of $50,000 in taxable income, under $200,000, results in $10,000 more in tax?

Yes, this seems reasonable, but of course it depends on how much other income you have.  Ordinary income is taxed at seven different rates: 10, 12, 22, 24, 32, 35 and 37 percent. Any amount over $47,150 is taxed at 22%.  

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