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How Tax Brackets Work

Personal tax rates are approximately as follows:

It is important to realize that if your taxable income is one dollar into the next tax bracket, it is only that dollar that is taxed at the higher rate.

Example: Taxable income of $120,000

  • First $55,867 taxed at approximately 17% after personal exemption

  • Next $55,866 taxed at approximately 30.5%

  • Remaining $8,267 taxed at approximately 36%

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