How much is $250,000?
When it comes to "adjustable gross income" -- which is the number that decides your tax bracket -- it's really about $315,000. David Leonhardt explains:
Earning $250,000 in adjustable gross income is different from earning $250,000 in total income. High-income households tend to take a significant number of deductions. At our request, Roberton Williams at the Tax Policy Center analyzed the total income of households with $240,000 to $260,000 a year in taxable income. On average, they made $315,000 in adjusted gross income, including $32,000 in capital gains and dividends. So when you hear talk about taxes on people making at least $250,000 a year, it really tends to mean taxes on income above $315,000 a year.
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