The chart below details some of the various factors that can impact a taxpayer’s marginal tax rate, including both ordinary income tax brackets and the Alternative Minimum Tax (AMT), the tax treatment of long-term capital gains and qualified dividends, the payroll taxes that apply to earned income for wage employees and the self-employed, the new 0.9% (on earned income) and 3.8% (on net investment income) Medicare surtaxes, and the impact of various phaseouts including the Personal Exemption Phaseout (PEP), phaseout of itemized deductions (Pease), and the AMT exemption phaseout.
