Governments impose a tax on income generated by individuals or businesses. This is called an income tax. It is important to learn to calculate your income tax correctly.
Here we suggest an effective method of calculating your income tax.
Individual Tax Threshold
Income taxes are not random. Certain thresholds govern the individual income tax. For example, the tax threshold depends on factors such as a person’s occupation, income, or type of business.
For instance, marginal income tax rates usually range from around 10% to 37%. This depends on the range your income lies within. The different tax ranges are “brackets.” If your income falls within a certain bracket, that bracket’s rate applies.
So to calculate your income tax, you need to use the rate that belongs to your income bracket.
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