68

In the US (and realistically every other country in the world that has graduated income tax brackets), the marginal rate applies only to income in that bracket, not all income. The intention of the tax code is not to penalize someone that makes an extra $1 in income by taxing every previous dollar they've made at a higher rate so they end up worse off after ...


14

Two issues here. First you aren't taxed on your gross income, at the minimum you'd typically reduce your gross income by the standard deduction (12,550 for single, though doesn't apply if married filing single or if you're a nonresident alien/dual status alien barring certain exceptions). Search "taxable income vs gross income", or "...


5

Just for fun, let's suppose your second offer was for $165K instead of $175K. Now, if tax brackets were flat percentages, your after tax would be: $153,000 * .76 = $116,280 $165,000 * .68 = $112,200 So you wouldn't want to make more money; yikes! If that's how tax brackets worked, anyone approaching a cutoff (which in this case is $164,926 in 2021), would ...


5

Yes, you have it right. Both traditional mutual funds and ETFs pass on the capital gains generated by selling the fund’s assets to the holders of the fund in the form of capital gain distributions. The fund holder will receive these distributions usually once per year, and they are paid either in cash or by issuing additional fund shares (reinvestment), in a ...


4

While agreeing with @jwh20's comment that you should consult a tax accountant, a few notes to dispel what appears to be some missunderstandigns: In general, you do not get to chose which country/ies you must pay taxes to. Each country's laws define who is taxed, by which concepts, and how much. This is what goes. Of course, you may change which laws apply ...


2

Canada has a bilateral tax treaty with Switzerland. There are a lot of details, but the gist of it is in this quote from Article 22: tax payable in Switzerland on profits, income or gains arising in Switzerland shall be deducted from any Canadian tax payable in respect of such profits, income or gains When you prepare your tax return, you will indicate the ...


1

Your adjusted basis is original basis + expense of sale (includes staging but also other costs) − depreciation allowed or allowable + capital improvements. You can see this on Form 4797, Part III; rental property is most likely section 1250. In your example, it'd be $1.06 million minus depreciation (hopefully you took depreciation on the furnace and water ...


1

You are talking about conversions, which are different from contributions. There is no limit on the amount you can convert, so you can do the full $11k, and indeed this is probably what you want to do. How much did you originally contribute to your Roth IRA in 2020 and 2021? You will owe regular income tax on the amount you convert minus the sum of your ...


1

If your income is so low that your tax liability would either be zero, or less than the $3,000 non-refundable tax credit, then you wouldn't be entitled to the whole $3,000 credit. What happens in April each year is a settlement between what you have paid them, and what you should have paid them. Overpaying doesn't change what you should have paid them. ...


Only top voted, non community-wiki answers of a minimum length are eligible