What is a Tax Bracket?

Short answer: It is the rate at which the last dollar of taxable income is taxed in any given year. For most people, the first dollar you earn at the beginning of the year is taxed lower than the last dollar you earn at the end of the year. The brackets determine how much of each dollar is taxed a particular rate. For example, the first $5,000 you earn in a year could be taxed at let’s say – 10% (10% bracket), the next $10,000 at 15% (15% bracket), and so on. Note that the no amount gets taxed at more than one rate. Click here to find out your 2010 marginal tax bracket.

 Simply Taxes, LLC is a local year-round tax preparation firm with an office located in North Raleigh. Our Raleigh accountants are ready to assist you with your questions pertaining to this tax topic and others.

The information contained within this article is for general guidance only. As such, it should not be used as a substitute for consulting with professional accounting, tax, legal or other competent advisers.

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