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Note: The writer is not really CPA or tax quality. This article is for general information purposes, and needs to not be construed as tax advice. Readers are strongly inspired to consult their tax professional regarding their personal tax situation.

Marginal tax rate may be the rate of tax fresh on your last (or highest) amount of income. In the described example, the person is being taxed with a marginal tax rate of 25% with taxable income of $45,000. This should mean he or she is paying 25% federal tax on her last dollars of income (more than $33,950).

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