Question

In 2016, marvin, a cash basis taxpayer, took a $2,000 itemized deduction for state income taxes paid. this increased his itemized deductions to a total that was $800 more than the standard deduction. in 2016, marvin received a $1,600 refund when he filed his 2016 state income tax return. marvin was in the 15% marginal tax bracket in 2016, but was in the 35% marginal tax bracket in 2017.

Answer 1

True, depending on the type of income you earn, you are then moved into different tax brackets. When filing for taxes and estimating the amount of taxes you will be paying, you need to consider the amount of money you earn, your deductions and your filing status.