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Old 12-27-2017, 01:18 AM   #61
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Agreed. What do you think is the easiest way to gain this understanding? I donít understand it now, would have no chance of modeling our situation accurately.
I would use Turbo Tax, and try to understand the pieces that make up your tax amount, such as the QDiv & LTCG worksheet which explains how the 15% tax on Divs and LTCGs can parallel the 15% income tax to make 30%. I'm not collecting SS yet so I'm not sure where the taxability of that is calculated but it shouldn't be hard to find. Same with subsidies. If you understand the pieces and just want to see the bottom line, TaxCaster should be fine but I don't think it shows the underlying forms and worksheets.
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Old 12-27-2017, 02:26 AM   #62
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Originally Posted by 43210 View Post
The best alternative is really to understand the math directly. Then the tax software or spreadsheets, graphs, info on web, etc, can reinforce that.
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Originally Posted by Scuba View Post
Agreed. What do you think is the easiest way to gain this understanding? I donít understand it now, would have no chance of modeling our situation accurately.
One key math concept to understand is "Piecewise Functions". You can google it, but here are a few links.
https://en.wikipedia.org/wiki/Piecewise
Piecewise Functions | Coolmath.com
https://www.khanacademy.org/tag/piecewise-functions

Then understand that things like
max(f(x),g(x))
min(f(x),g(x))
can be viewed as piecewise functions.

Also marginal rates are like derivatives (from calculus), except there is often some rounding.

Also there are really more than one variable (e.g. different forms of income taxed differently) so you actually have partial derivatives of multivariable functions.
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