How Does a Graduated Income Tax Work?
The principle behind a graduated income tax is that the more money an individual earns, the higher the tax rate. For instance, according to Internal Revenue Procedure 2009-50, in 2010 the first $8,375 of an individual’s income is taxed at 10%, the next $25,625 is taxed at 15%, the next $48,400 is taxed at 25%, and so on. On the other hand, the tax brackets for a married person or a head of household are different. document.getElementById(‘adsense_placeholder_2’).innerHTML = document.getElementById(‘adsense_ad_2_hidden’).innerHTML; In addition, a certain portion of a person’s income can be deducted from his total income before it is subject to income tax. For instance, in 2010 a taxpayer may deduct $3,650 from his income for himself and for each dependent claimed on his income tax return. In addition, he may either claim a standard deduction of $5,700 or itemize deductions to reduce his income further. Once the individual’s or family’s taxable income has been calculated, the taxpayer’s
