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March 8, 2025
Question

Does it make sense that a one time increase of $50,000 in taxable income, under $200,000, results in $10,000 more in tax?

  • March 8, 2025
  • 1 reply
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The increase was the results of an out of court settlement in a land sale dispute.

    1 reply

    March 8, 2025

    Yes, this seems reasonable, but of course it depends on how much other income you have.  Ordinary income is taxed at seven different rates: 10, 12, 22, 24, 32, 35 and 37 percent. Any amount over $47,150 is taxed at 22%.