Tax brackets are divisions where tax rates change explicitly in the progressive tax system (or explicitly regressive tax system, though this is far less frequently). Basically, they are the cutoff values ​​for taxable income - income over a certain point will be taxed at a higher level.
Video Tax bracket
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Imagine there are three tax brackets: 10%, 20%, and 30%. The 10% rate applies for earnings of $ 1 to $ 10,000; 20% rate applies to earnings from $ 10,001 to $ 20,000; and the 30% rate applies to all earnings above $ 20,000.
Under this system, a person earning $ 10,000 will be taxed at a rate of 10%, paying a total of $ 1,000. Someone who earns $ 5,000 will pay $ 500, and so on.
Meanwhile, someone with a $ 25,000 income will face more complex calculations. The first $ 10,000 rate will be 10%; rates ranging from $ 10,001 to $ 20,000 will be 20%; and the above rate will be 30%. Thus, they will pay $ 1,000 for $ 10,000 first income (10%); $ 2,000 for second $ 10,000 (20%); and $ 1,500 for the last $ 5,000 revenue (30%); in total, they will pay $ 4,500, or an average tax rate of 18%.
In practice, the calculation is simplified by using a slope-point form or a slope-form of the linear equation for taxes on a certain bracket, either as a tax on the bottom of the bracket plus tax on the marginal amount in bracket:
atau pajak atas seluruh jumlah ( pada tingkat marjinal), minus jumlah yang melebih-lebihkan pajak pada ujung bawah braket.
See progressive tax # Computing for details.
Maps Tax bracket
The tax brackets in Australia
Personal income tax rate (residents)
Financial year 2010-11, 2011-12
The above price does not include Medicare charges of 2.0%.
The financial year 2012-13
The rates above do not include Medicare levies of 2.0%
Legal bracket in Canada
The Canadian Federal Government has the following tax brackets for the 2012 tax year (all in Canadian dollars). Note that the "basic personal amount" of $ 15,527 effectively means that income up to this amount is not taxable, although included in the calculation of taxable income.
Every province except QuÃÆ' Â © bec adds their own taxes above federal taxes. QuÃÆ' Â © bec has an entirely different income tax.
Province/Territory Tax Fee for 2012:
Tax brackets in India
The income tax sheets applicable for the financial year 2015-16 (Assessment of Years 2016-17) are summarized below:
Tax brackets in Malta
Malta has the following tax brackets for revenue received during 2012
Single Rate:
Married Rates:
Tax brackets in the Netherlands
Tax bracket in New Zealand
New Zealand has the following income tax brackets (as of October 1, 2010). All values ​​are in New Zealand dollars, with ACC Income fees not included.
- 10.5% to $ 14,000
- 17.5% from $ 14,001 to $ 48,000
- 30% $ 48,001 to $ 70,000
- 33% over $ 70,000
- 45% when the employee did not complete the statement form (IR330)
The ACC Revenue Levy for fiscal year 2010 was 2.0%, up from 1.7% in fiscal year 2008.
The tax brackets in Singapore
2007 & amp; 2008
There will be 20% private tax rebates awarded for 2008, up to a maximum of $ 2,000.
2013
All figures in Singapore dollars.
Tax brackets in South Africa
The Minister of Finance announced the new tax rate for fiscal year 2012-2013. They are as follows:
Tax brackets for 2012 ratings
Tax brackets for 2013 ratings
Tax brackets in Switzerland
Personal income tax is progressive. The total rate usually does not exceed 40%.
The Swiss Federal Tax Administration website [2] outlines the Swiss tax system, and full details and tax tables are available in PDF documents.
The complexity of the system was partly due to the Confederacy, 26 Cantonese who formed the federation, and about 2 900 communes [town] levied their own taxes under the Federal Constitution and 26 of the Canton Constitution.
The tax brackets in Taiwan
Income tax rate (Individual)
Fiscal year 2013
Tax brackets in the United Kingdom
Tax brackets in the United States
tax brackets 2018 under current law
Since January 1, 2018, the tax brackets have been updated due to the passage of the Tax Cut and Employment Act:
In the United States, the dollar amount of the Federal tax income tax deduction and personal exemption for taxpayers and dependents are adjusted annually to account for inflation. This results in an annual change in the brackets of personal income even when the Federal income tax rate remains unchanged.
2011 tax bracket
Two higher tax brackets (36% and 39.6%) were added in 1993, and then taxes on all brackets were lowered in 2001 to 2003 as follows:
Internal Income Code Terminology
Whole Wage is the amount your employer pays, plus your income tax liability. Although the tax itself is included in this figure, it is usually used when discussing one's salary. For example, John paid $ 50/hour as an electrical engineer. The annual gross salary is $ 50/hour x 2,000 hours/year = $ 100,000/year. Of this amount, partially paid to John, and the rest for taxes.
Wage W-2 is wages that appear on W-2 employees issued by their employer every year in January. A copy of W-2 is sent to the Internal Revenue Service (IRS). This is Gross Wages minus any contribution to the pre-tax plan. Form W-2 also shows the amount that the employer withheld for federal income tax.
Wage W-2 = Gross Less salary (contribution to the employer's pension plan) less (contribution to the employer's health plan) less (contribution to some other employers plan)
Total Revenue is the sum of all taxable income, including W-2 wages. Almost all earnings are taxed. There are some exceptions to individuals such as non-taxable interest on government bonds, part of Social Security (SS) income (not payments to SS, but payments from SS to individuals), etc.
Adjusted Gross Revenue (AGI) is Total Income minus any special deductions allowed. As; allowances paid (revenues to beneficiaries), allowable moving expenses, entrepreneurship pension plans, student loan interest, etc.
Itemized Reduction is the other specific deduction such as; home mortgage interest, state income tax or sales tax, local property tax, charitable contribution, state income tax withheld, etc.
Standard Reduction is a kind of Minimum Itemization Reduction. If you add all the Detailed Deductions and that's smaller than Standard Reduction, you take Standard Reduction. In 2007 this was $ 5,350 for those who filed individually and $ 10,700 for the archives to get married together.
Personal Exemption is a tax exemption in which the taxpayer may deduct the amount of their gross income for each dependent they can claim. That's $ 3,400 in 2007.
Example tax calculation
Given the complexity of the US income tax code, people often feel the need to consult a tax accountant or a professional tax expert. For example, John, a 44-year-old married with two children, earned a gross salary of $ 100,000 in 2007. He donated $ 15,500 per year to his employer's 401 (k) retirement plan, paying $ 1,800 per year to his employer. a family health plan, and $ 500 per year for his employer's Flexfund medical expenses plan. All plans were allowed to get a pre-tax contribution.
Gross salary = $ 100,000
Upah W-2 = $ 100.000 - $ 15.500 - $ 1.800 - $ 500 = $ 82.200
John's income and his other wife were $ 12,000 from John's wife's salary (he also got W-2 but no pre-tax contribution), $ 200 interest from bank account, and $ 150 state tax refund.
Total Earnings = $ 82,200 $ 12,000 $ 200 $ 150 = $ 94,550.
John's employer moved John to the new office and his transfer fee was $ 8,000, of which $ 2,000 was not replaced by his employer.
Adjusted Gross Income = $ 94,550 - $ 2,000 = $ 92,550.
The deductions specified by John are $ 22,300 (mortgage interest, property tax, and state income tax are withheld).
John has four personal exceptions - himself, his wife and two children. His total private exceptions are 4 x $ 3,400 = $ 13,600.
Taxable income = $ 92,550 - $ 22,300 - $ 13,600 = $ 56,650.
Tax on Taxable Income is found in the Tax Table if Taxable Income is less than $ 100,000 and calculated if more than $ 100,000. Both will be used. The Tax Table can be found in Directive 1040 of 2007. List of Table Income taxes in $ 50 increments for all categories of taxpayers, single, married archives, separate marriage appointments, and heads of households. For Taxable Revenue ranges "at least $ 56,650 but less than $ 56,700" tax is $ 7,718 for taxpayers married to joint submissions.
The 2007 Tax Tariff Schedule for archives to marry together is:
Tax is 10% at $ 15,650 first = $ 1,565.00
plus 15% of the amount above $ 15,650 to $ 56,650 = $ 41,000 x 15% = $ 6,150.00
Total = $ 7,715.00
The difference is due to the use of the tax table in the first determination, and this table is in the $ 50 increase. John's taxable income was at the bottom of the increase. If the taxable income is $ 56,675, amid the increase, then the calculated amount is $ 7,718.75.
In addition to Federal income taxes, John may pay state income tax, Social Security taxes, and Medicare taxes. The Social Security tax in 2007 for John was 6.2% at $ 97,500 earned income first (wages), or a maximum of $ 6,045. There are no exceptions to the revenue received for Social Security so John will pay a maximum of $ 6,045. His wife will pay $ 12,000 x 6.2% = $ 744. Medicare is 1.45% on all income received without a maximum. John and his wife will pay $ 112,000 x 1.45% = $ 1,624 for Medicare in 2007.
Most states also charge income taxes, except Alaska, Florida, Nevada, South Dakota, Texas, Washington, New Hampshire, Tennessee, and Wyoming.
See also
- Income tax threshold
References
External links
- Learn more about Canada Personal Income Tax Rate, Brackets and Surtax for 2011
Source of the article : Wikipedia
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