top marginal rate for federal tax 2024

[jscui]

my combined income is in the top tax rate of 37%. however, when I entered the imcome for 1099-INT it calculated a tax of 42.6&

[Bsch4477]

Look at Schedule 2 line 12. The additional net investment 3.8% tax might explain it. 

[baldietax · Accepted solution]

if you're just looking at the Fed tax due monitor that could encompass other things happening as a result of inputting more income and increasing your AGI - deductions could be phasing out, you may be paying Net Investment Income Tax (3.8%), it could be affecting the rate on Long Term Cap Gains / Qualified Dividends etc; also that total includes any penalties due based on what has been input so far.  To understand properly how a 1099-INT is affecting your tax you need to look at what is happening to the different lines on the Form 1040 and a key worksheet in the tax calc is "Qualified Dividends and Capital Gain Tax Worksheet".

[jscui]

Thanks for the answers. I find it weird that when you just change your W-2 income by play minus 10,000 and compare to adding it back, there is no explanation why it is 27.8 % not 22% listed in the irs income bracket? Even by adding 3.8% investment, it won’t get 27.%

[LindaS5247]

Different forms of income are taxed at different rates. Your tax bracket relies on using your taxable income to determine your federal taxes owed. 

Not all income is treated the same for tax purposes. Income you earn from your job gets taxed through the tax brackets used on ordinary income. Long-term capital gains, on the other hand, are taxed at a rate between 0% and 20%, depending on your income level. 

No matter what type of income you make or the tax bracket you’re in, your goal should be to get your effective tax rate as low as possible.  The actual percentage of your taxable income that goes to the IRS is referred to as your effective tax rate. Your effective tax rates determine what percentage of your taxable income is being paid in tax.

A tax bracket is a range of taxable income that is subject to a specific tax percentage or tax rate.

The brackets used to calculate your income tax depend on your filing status. For the 2024 tax year, there are seven tax brackets. Each one has a different tax rate ranging from 10% to 37%.

Your tax rate comes from schedules that are published by the IRS and they are based on your taxable income. 

Click here for What is My Tax Bracket?

Click here for What is a Tax Table?

[jscui]

When I added more W-2income as I forgot to add , my TurboTax add 27% federal tax for me not the 22% bracket I am supposed to be for a AGI below $93K as a single filling 

[VolvoGirl]

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.

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. It could be the Medicare Net Investment tax.