I want to be sure I pay the right amount in tax. How is tax calculated when my taxable income is a round number?
For example, say my taxable income is $1,000. The tax table says there are two options that could apply: the first tax calculation is for the $950 - $1,000 range and another tax calculation is for $1,000 - $1,050.
If my taxable income is $1,000, does that mean both ranges apply, so theoretically I could take the slightly smaller tax calculation based on the $950 - $1,000 range?
This is confusing and I want to be sure and pay the right amount. Thank you in advance for your help.
When looking at the tax table please notice that above the first number it says "At least" and above the second number it says "But less than". In your example with the taxable income of $1,000, you would use the $1,000- $1,050 range.
Also please be aware if you have any Qualified Dividends or Capital Gains then you will need to use the Qualified Dividends and Capital Gain Tax Worksheet to calculate your tax.
When looking at the tax table please notice that above the first number it says "At least" and above the second number it says "But less than". In your example with the taxable income of $1,000, you would use the $1,000- $1,050 range.
Also please be aware if you have any Qualified Dividends or Capital Gains then you will need to use the Qualified Dividends and Capital Gain Tax Worksheet to calculate your tax.