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How can two different people pay diffrent taxes on the same amount of money.?


is this really possible

like if one got 50,000 in a lump sum versus someone who get it in a weekly check.

If one got $50,000 in equal weekly increments and the other got $50,000 in a lump sum and their situations were otherwise identical, they would pay the same amount of tax. The withholding amounts up front would differ and the size of any refund after the return was filed would also differ.

Yes, people pay different taxes based on their filing status, married/single, kids.

In addition, the tax rate is progressive, so the more you make, the higher rate you pay.

There are many ways. Lump sum vs. a check every week doesn't make a difference if everything else is the same.

Different personal situations, like marital status, number of dependents, or eligibility for deductions or credits will make a difference in what tax is paid on the same amount. Source of the income can also matter - for self-employment you'd pay more social security and medicare taxes than if you made the same amount as an employee. And long term capital gains is taxed at a different rate than other income.

The previous three answers are all partially correct. I'm not a Tax Consultant (yet) so my answers will probably not be totally correct either and you can鈥檛 base your tax decisions on what I say. However, let me respond.
Your W-4 will determine how much is withheld per pay period; based on the number of 鈥渄ependents鈥?you claim.
Also, when you get a high Lump Sum, the charts are set up to figure this is what you will get every month/week (pay period), so a higher amount will be withheld because you will be in a higher tax bracket than if you had the same amount spread out over, say, 26 pay periods.

Additionally the source of the income will influence the amount that is withheld; self-employed vs. payroll vs. un-earned income. Un-Earned Income can take many forms, such as Capital Gains (sometimes), Gifts (from non-family or too large an amount), Inheritance, Royalties (sometimes), Interest, Lottery, Gambling, etc. The government has a different way to get your money from each of these; when it can.
Capital Gains is not 鈥渋ncome鈥?but is taxed. Some forms of money you get are not taxed at all, such as a $10,000 gift from a family member, or an insurance settlement.

In the end, it all comes down to the filing of your Income Tax Return. That鈥檚 where any differences will appear. This is where you need a qualified CPA. The amount of deductions one MAY take vs. what someone DOES take depends on the confidence of the CPA that they are using legal and accepted practices. One person may have qualified medical bills that the other person doesn't have, qualifying expenses may be different, charitable gift giving; all these will make a difference to the bottom line.
Once, I had two CPA鈥檚 prepare the same return, for the same year, and come up with more than a thousand dollars difference in the amount of my refund. One CPA knew the rules better than the other one did.

Not only is is possible, it's more likely that they'd pay somewhat different amounts that they'd pay the same amount. But let's clear one thing up first. Two taxpayers with identical tax situations earning the same amount would pay the same tax whether the income was in weekly increments or a once a year lump sum. The frequency of payment doesn't impact the tax bill.

Now to the things that can lead to differences -- sometimes very large ones -- in the tax liability. First off, your filing status matters. A married couple filing a joint return will pay less tax than a single person with the same income, all else being equal. Also your age matters if you're 66 or older. Then there's itemized deductions vs the standard deduction. Now you have to factor in the number of exemptions for dependents.

The type of income matters as well. If you're a wage earner you'll pay less tax than someone who is self employed and maked the same income but you'll pay more than someone who has the same amount of unearned income. This disparity is due to the differences in Social Security and Medicare taxes. And if that unearned income is in the form of long term capital gains the tax rate will drop yet again. In fact, someone with $50,000 in long term capital gains as their only income will pay only 5% tax on that income, well below the rate that a single wage earner will pay!

Now toss in various credits such as the EIC, Child Tax Credit, Additional Chilc Tax Credit and various educational credits just to name a few and it's easy to see that two people with the same income are much more likely to pay different amounts of tax than the same amount.

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