My 2018 income is $367653 and the total tax is $71,367 which is equal to ablut 19.41%. How does the the 2018 tax rate apply? (35% Income $200,000. to $500,000.)
My 2018 income is $367,653 and the total tax is $71,367 which is equal to about 19.41%. How does the 2018 tax rate apply? (35% Income $200,000. to $500,000.)
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1 Best answer
Zbucklyo
Level 9
Jun 3, 2019 1:45:42 PM
You are confusing marginal and average tax rates. Only income above the tax bracket thresholds are taxed at the higher rate. And, as Lisa mentioned, some sources of income are taxed at a lower rate than wage income.
2 Replies
Lisa995
Alumni
Jun 3, 2019 1:45:41 PM
Do you have dividends or capital gains involved? They are taxed at a lower rate.
Zbucklyo
Level 9
Jun 3, 2019 1:45:42 PM
You are confusing marginal and average tax rates. Only income above the tax bracket thresholds are taxed at the higher rate. And, as Lisa mentioned, some sources of income are taxed at a lower rate than wage income.