Marginal Tax Bracket
Barron's Real Estate Dictionary:
Top
Marginal Tax Bracket
The amount of income tax that an investor would pay on the next dollar of income. Generally, the marginal rate is higher than the average rate because of the progressive tax rate structure.
Example: Morris, a married taxpayer who files a joint return, earns $90,000, on which a $16,000 federal income tax payment is required.
This tax represents an average rate of 17.8% ($16,000 ÷ $90,000 = 17.8%). If he were to earn $1,000 more, the tax would increase by $300, because he is in the 30% marginal tax bracket.
Example: Morris, a married taxpayer who files a joint return, earns $90,000, on which a $16,000 federal income tax payment is required.
This tax represents an average rate of 17.8% ($16,000 ÷ $90,000 = 17.8%). If he were to earn $1,000 more, the tax would increase by $300, because he is in the 30% marginal tax bracket.
| Marginal Property, Margin | |
| Marital Deduction, Market |
Post a question - any question - to the WikiAnswers community:
Copyrights:
Barron's Real Estate Dictionary
Dictionary of Real Estate Terms. Copyright © 2008 by Barron's Educational Series, Inc. All rights reserved.
Read more
Mentioned in
Tax Bracket
(business term)
Yield Equivalence
(business term)
Marginal Tax Rate, Bracket
(business term)
Income Splitting
(in accounting)
Tax-Equivalent Yield
(business term)
» More