Page 8 - Means Wealth 2020/2021 Perspectives
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HOW CAN I USE MY MARGINAL TAX RATE BRACKET IN
            MY YEAR-END TAX PLANNING?
          MY YEAR-END TAX PLANNING?
                            Article Provided by BerryDunn


              e have all likely heard of some of the more typical year-end tax
          W planning strategies like deferring income and/or accelerating
          expenses, harvesting capital losses and maximizing charitable giving, but did
          you know that your marginal tax rate impacts the tax planning related to all
          of these strategies?

          So what exactly does marginal tax rate mean? The marginal tax rate is the
          tax rate that will apply to the next dollar of taxable income or the value of
          the next dollar of deductions. In tax planning, we use the marginal rate to
          measure how the tax obligation will change based on a particular strategy.
          We calculate the marginal tax rate by dividing the additional amount of taxes
          due by the amount of the additional income or deduction being considered.
          The highest marginal federal income tax rate for 2020 is 37%.


          Filing Status and Federal Income Tax Rates 2020
          *refer to Page 27 to see the Projected Tax Rates for 2021


           Tax Rate  Married Filing Joint  Single    Married Filing Separately

           10%     $0-$19,750       $0-$9,875        $0-$9,875
           12%     $19,751-$80,250  $9,876-$40,125   $9,876-$40,125
           22%     $80,251-$171,050  $40,126-$85,525  $40,126-$85,525
           24%     $171,051-$326,600  $85,526-$163,300  $85,526-$163,300
           32%     $326,601-$414,700  $163,301-$207,350  $163,301-$207,350
           35%     $414,701-$622,050  $207,351-$518,400  $207,351-$518,400

           37%     over $622,050    over $518,400    over $311,025
                  “       instead of wondering where it went.


                       A budget is telling your money where to go


                                                     – Dave Ramsey


                                                              “

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