Class Notes 032608 US Income Tax System

Class Notes 032608 US Income Tax System - 3/26/08 U.S....

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3/26/08 U.S. Income Tax System Approach in U.S. tax system is to apply progressively  higher rates to higher incomes. INSERT TAX POLICY CENTER BRACKETS/RATES See rates 10 % to 35 % across brackets 0-7,825 to 349,700+ Pay rate for amount in that bracket no matter what total income is someone at $350,000  does not pay 35% on entire amount. Also see standard deductions  and personal exemptions  which add a 0% tax bracket. o Implies even more progressivity Look at tax forms, describe process 1. Add up all your income—wages, interest, etc. 2. Solve for AGI (Adjusted Gross Income) by subtracting IRA deductions, student  loans, etc. 3. Subtract  either  standard or itemized deductions Standard is from table Itemized is from a list of allowable categories: Home mortgage interest Charitable contributions 4. Subtract personal exemptions for each person in household. 5.
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This note was uploaded on 04/28/2008 for the course ECO 110 taught by Professor Liugang during the Fall '08 term at SUNY Albany.

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Class Notes 032608 US Income Tax System - 3/26/08 U.S....

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