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Revision as of 02:11, 23 January 2025

The IRS has set many tax deductions and benefits secured for taxpayers. Unfortunately, some taxpayers who bring home a top level of income can see these benefits phased out as their income climbs.

Marginal tax rate could be the rate of tax instead of on your last (or highest) amount income. In the described example, the individual is being taxed with a marginal tax rate of 25% with taxable income of $45,000. This would mean she or he is paying 25% federal tax on her last dollars of income (more than $33,950).

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