The marginal tax rate is the amount of tax that is supposed to be paid on the additional dollar income. It is the extra income that has to be paid when there is an increase in the person’s income. The increase of the income can have a great impact on the amount or rate of taxes that you will pay as you may move higher on the tax bracket. The higher you are on the tax bracket, the higher the amount of taxes that you will have to pay.
Here are more information on the marginal tax rate:
- Calculations. The highest tax bracket based on your income is the marginal tax rate. If you do not know which category of tax bracket you belong to, you can search for the latest information on tax brackets. There are tax tables that you can use to help you identify what bracket you belong to. Currently, the percentages of taxes that you will have to pay are 10%, 15%, 25%, 28% 33% and 35%. The calculation will depend on how much you earn. If you have a salary that reaches up to 4 brackets, you will have to pay 10% on the first bracket, 15% on the second bracket, 25% on the third bracket and 28% or lower for the fourth bracket. In this instance, your marginal tax rate is 28% and the value will be determined based on how high your salary is on the fourth bracket.
- Marginal Tax Rate Calculator. To help you understand more about how to get your marginal tax rate based on your income, you can use a free service on the Internet called the Marginal Tax Rate. This tool can be found on the website dinkytown.net. This marginal tax rate calculator is good for the marginal income of 2009. All you have to do is to enter your wage, your filing status, if you are someone’s dependent and additional dependents and the deductions. You can click on the calculate button to see the results of your marginal tax rate. You can also see the view report to look at the details of the computation. This is a great tool to use so that you will have an idea on the percentage of your salary that goes to taxes. If you are not familiar with the definitions used in the calculator, you can scroll down on the website and read the definitions.
This is some of the essential information you need to know so that you can calculate your marginal tax rate. You will need this information so that you can be ready when your taxes are due to be paid. It is also helpful if you read about the different types of taxes that are deducted from your salary. The marginal tax rate is only used for ordinary income. You can see if you have tax credits that will help in lowering the amount of income that you are required to pay.