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Greatly Abbreviated Income Tax Report
To Show Calculation of Federal Income Tax & the Effect of the Graduated Income Tax
| Filing Status = Single |
|
Alternative 1 |
Alternative 2 |
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|
|
| Adjusted Gross Income (AGI) |
|
$ 30,000 |
$ 60,000 |
| Less Standard
Deduction |
|
(4,300) |
(4,300) |
| AGI - Standard
Deduction |
|
25,700 |
55,700 |
| Less Dependency
Exemption(s) |
|
(2,750) |
(2,750) |
| Taxable income |
|
22,950 |
52,950 |
| Bottom of applicable taxable income bracket |
|
-000- |
(25,750) |
| Taxable income in marginal bracket (excess) |
|
22,950 |
27,200 |
| Marginal tax rate |
x |
15.0% |
28.0% |
| Tax on excess income at marginal tax rate |
= |
3,443 |
7,616 |
| Base amount of tax |
|
-000- |
3,863 |
| Total tax |
|
$ 3,443 |
$ 11,479 |
|
|
|
|
| Alternative 2 Results |
|
|
|
| Additional tax |
A |
11,479 - 3,443 |
= 8,036 |
| Additional income |
B |
60,000 - 30,000 |
= 30,000 |
| Effective tax rate on additional income |
A/B |
|
= 26.8% |
Copyright © 1999 Ira M. Freed |
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