Question

How does the standard tax deduction work with tax brackets? Is my tax liability based on total income or taxable income?

Forum|Forum|3 years ago
March 4, 2023
1 reply
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For example, if my Total income in 2023 was $71,378, but after the standard deduction of $12,950 my taxable income becomes $58,428, shouldn't I be taxed on the latter amount?

Further, Turbotax is showing a blended tax rate of 14.5%, why is it a straight number like that versus the tax brackets of 10%, 12%, 22%, etc.?

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Employee

The blended tax rate is just a pseudo average number, based on everything. The normal tax brackets are actually used

so...part of your taxable income is taxed at 10%, part at 12%, part at 22%...etc.

And self-employed people also get some SS & Medicare taxes added on top of those bracket numbers.

Soe the Psedo-average blended rate (or sometimes says "effective" rate)... just gives you a general idea of your overall tax

See the table:

2022-2023 Tax Brackets and Federal Income Tax Rates | Kiplinger

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*