Word bank: change · Effective · return · take-home · withheld

1. Marginal rate = rate on your last dollar. rate = total tax ÷ income.
2. A raise never lowers pay because of brackets.
3. W-2 → tax (Form 1040), usually due around April 15.
4. Filing can get money back.
5. Rules yearly — check irs.gov.

1. 1. Getting a raise that moves you into a higher tax bracket can make your total take-home pay go down.

   True/False

2. You buy a $50 jacket in a Texas city with the maximum combined sales tax of 8.25%.

   2. About how much do you pay in total?

   • A. $50.00
   • B. $58.25
   • C. $54.13
   • D. $53.13

3. Your employer withheld more federal income tax this year than you actually owe.

   3. What happens when you file?

   • A. You get the difference back as a refund.
   • B. The extra is lost.
   • C. It's applied to your student loans automatically.
   • D. You owe a penalty.

1. 1. Using the same made-up brackets, what's the tax on $20,000, and the effective rate?

2. 2. What's the difference between a marginal and an effective tax rate?

1. 1. Why do you think the tax brackets myth is so common?

2. 2. Should everyone be taught to file their own taxes in high school?