Hey Fools,Just wondering; What is the tax rate for a household with an gross income of approximately $60,000? I was looking at mine and my wife's pay stub and it looks like the % being withheld from mine is around 16%, and hers is around 10.5%. Does this sound right? Or is there an easier way to find this information? Thanks for your help!Knavish
Hey Fools,Just wondering; What is the tax rate for a household with an gross income of approximately $60,000? I was looking at mine and my wife's pay stub and it looks like the % being withheld from mine is around 16%, and hers is around 10.5%. Does this sound right? Or is there an easier way to find this information? Thanks for your help!=========The question I think you are getting at deals with understanding the concept of a "marginal" tax bracket versus one's "overall" tax bracket.For discussion purposes I will assume you are a DINK (double income no kids).Your 60k gross will be reduced by "exemptions" for both you and your wife (2,750 each) and the "standard deduction" for married couples which is 7,100.So your gross income less these deductions results in your taxable income of 47,400.The current tax law allows for a "graduated" method of taxing income. In a nutshell this means that the first ~43,000 of income is taxed at 15% and the next ~57,000 of income is taxed at 28% - and so on and so on until you get to the top bracket of 39.6% for taxable income over ~275,000.So in your case your overall tax would be computed asfollowsGross 60000 Exemp 1 -2750 Exemp 2 -2750 Standard -7100 Taxbl Inc 47400 Tax on 43000 at 0.15 = 6450Tax on 4400 at 0.28 = 1232 (Marginal rate=28%)Total tax = 7682% of tax to taxable income (overall rate= 16%) 0.162067511You should be able to see from this example that the "overall" rate is lower than the "marginal" rate.The marginal rate is the top bracket your income falls in in any given year.When people say they are in the 33% bracket then it helps to fully understand that not all of their income is taxed at that amount - only a portion.For planning purposes though it must be understood that if the taxpayer is in the 33% marginal bracket then any deduction they generate or any deferral of ordinary income into a subsequent year saves them 33 cents on the dollar.The above is a discussion for example only. I should be able to remember the exact standard deduction, bracket cut offs, exemption amounts, etc.... but they change the confounded amounts each year and I constantly find myself having to look the amounts up from my master tax guide. (which is at the office)hope this helpsPete
your tax rate is .28% for federal. Social Security is 7.65. And state varies the good state of Alabama is .3So minimum tax rate is at least .38%Toooo much.
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