7 Out of 10 Americans Don’t File Their Taxes Correctly (Are You One of Them?)

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And let’s say a miracle will happen, and your boss will raise your salary to $42,125… The 22 percent tax rate will only apply to the $2,000 earned income, not the entire sum. Still, you should be aware of the fact that reaching a higher tax bracket could mean bad news for your long-term capital gains tax rate.

As the name suggests, this type of tax rate applies to capital assets like properties, and stocks that you’ve owned for more than twelve months, so for more than a year. If you keep your taxable income below $80,000, you won’t have to pay taxes on your long-term capital gains. But if you can’t, you will pay 15 percent on your long-term capital gains.

Ahh, the rate could go even higher, as singles with $441,450 and joint filers with $496,600 could face a 20 percent rate.

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