Despite brand new tax rate reductions for this Jobs and Growth Tax Relief Reconciliation Act of 2003, the top marginal income tax bracket for many retirees is really a whopping forty six.3%. Why? Because Social Security benefits are subject to income tax bill. Those affected are Social Security recipients who have enough good fortune (misfortune?) to get subject to both the 25% taxes bracket along with the 85% inclusion rate for Social Security benefits.
What difficulties as your 'income' tax has a collection tax brackets each having its own tax rate from 10% to 35% (2009). These rates are added to your
taxable income which is income a lot more your 'tax free' a living.
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