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It’s a common misconception that if your income falls into a tax bracket, all your income is taxed at that rate. That’s not how the U.S. federal tax system works. If you see you’re in the 22% tax bracket, that doesn’t mean your entire income is taxed at 22%. Instead, your income is taxed in “layers” — each part of your income is taxed at the corresponding rate for that bracket. 2025 Example: $200,000 of Taxable Income (Married Filing Jointly) Let’s break this down so you can see how much is taxe
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