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Tax brackets show tax that is paid on the
"last" dollar earned. Tax brackets estimate
additional tax that you would pay on additional income.
The higher is your taxable income, the higher your federal tax
rate is. Supposedly you earn additional $500 and you are
in 25% bracket. That would result in additional $125
taxes. Tax Brackets Calculator 2005 shows current and
past tax brackets and calculates federal
tax for years 2000-2005 based on your filing status.
Average tax rate - tax rate as a percentage of your
income, which is usually lower than tax bracket rate is
also calculated.
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