I keep having to look these up, so here are the tax brackets for 2006.
| Marginal Tax Rate | [Taxable Income] Single | Married Filing Jointly |
| 10% | $0-$7,550 | $0-$15,100 |
| 15% | $7,551-$30,650 | $15,101-$61,300 |
| 25% | $30,651-$74,200 | $61,301-$123,700 |
| 28% | $74,201-$154,800 | $123,701-$188,450 |
| 33% | $154,801-$336,550 | $188,451-$336,550 |
| 35% | > $336,550 | > $336,550 |
For comparison, here are the 2005 tax brackets. Taken from IRS.gov. For state income taxes, this site is the best resource that I could find.
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I believe your single 15% and 25% tax rates are off. Should be 30,650 and 30,651, not 36,650 and 36,651.
I never understood the marginal tax rate. Does that mean when all is said and done between my income tax and my refund the amount I keep should be 25% of what I brought in?
i think that should be $30,650, not $36,650…or am i blind?
I’m graduating soon so I’m not making “real salary” as of now. But, if I were offered say $36k at one job and $40k at another, wouldn’t it be better to take the $36k because you are taxed at 15% and keep more of your money than at 40k x.25%?
i think there’s a typo there… the 15% single bracket is $7551- $30,650, not $36,650… bummer!
Fixed, thanks!
I really should have written this up first, but better late than never:
Myths About Marginal Tax Rates Explained
Many more folks will start to be hit by the Alternative Minimum Tax in the next few years. Your table does not take the AMT into account, but for those affected their marginal tax rate will be the AMT rate. The AMT is a modified flat tax system.