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Revision as of 03:18, 21 September 2024
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Because for the increasing tax rate of upper brackets, a reduction of taxable income in a very higher bracket saves you more tax than exactly the reduction for just a lower area. So let's compare the tax saving of contributing $1000 by an individual with a $30,000 income with what single person with a $100,000.
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But your employer comes with to pay 7.65% with the items income he pays you for your Social Security and Medicare health insurance. Most employees are unaware of the extra tax money your employer is paying you r. So, between you including your employer, the govt . takes 14.3% (= 2 times 7.65%) of your income. If you are self-employed instead of the whole 15.3%.
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