1 Answer

The tax is dependent on your total income not just one payment. If you are on say 30 cents in tne dollar that is the amount of tax ie: 30 cents for each dollar. If however you are on 48 cents in the dollar that is the tax rate on any new income. You may also find that the payment could put you into a higher tax bracket that is say you are on the border line of a tax bracket then the new payment would possibly put you into a higher bracket in which case you would pay tax on your TOTAL income at the new bracket level. If you have no income that is taxed then there is no tax on the $1200. Confused? taxation is not a easy one to answer without full details.

15 years ago. Rating: 0
Comment this answer Add new comment