Highest tax bracket is 37% and i'm well under, how 10K from 1099-INT adds up 4k to taxes owed? I expected to be at 35% rate and no other taxes as the amount above FICA taxable amount, etc..
possibly the sneaky net investment income tax which is 3.8 % form 8960
depending on your adjusted gross income. it kicks in at these adjusted gross income levels depending on filing status. Joint or surviving spouse AGI over $250K
single $200K, MFS $125K
Yes, if you add $10,000 of any kind of income into a tax return, it'll change the tax due.
The extra $10,000 can have many impacts throughout your return, such as:
When you enter one taxable transaction, you can't just watch the monitor. You increased your overall adjusted gross income and with that come many other changes in your return, not just the incremental tax on the one transaction. More income can make more of any Social Security taxable and can increase or decease any credits you qualified for.
I once added just $6 of interest and my tax due went up $12! I was right at the line and it pushed me into the next tax bracket. And it increased your AGI and that would decrease some deductions if you itemized on Schedule A. And by increasing your AGI it might reduce some credits you were getting like EIC.
Thank you, something new that i've learned today and still: 35%+3.8%=38.8% and what I see is 40.22% on the amount from 1099-INT, any ideas what 1.42% (40.22-38.8) additional amount could be?
Thank you, at that tax bracket rate person wouldn't be eligible for any credits/deductions.
net investment income tax form 8960 rate 3.8% makes it close to where i'm taxed at but still not there, as the exact rate at 40.22% and 35+3.8=38.8, trying to find out where 1.42% coming from