Do the IRS tax your personal income by dollar per dollar, meaning for every dollar, they tax 17% out of the whole, or is it based on a certain income bracket?
For example, if I make 1,500 per month, I will be tax 17%; but if I make 1,501, I will be tax 18%?
Or is it a flat tax where if I belong in a certain income bracket, I will only need to pay the same amount of tax as other in the same bracket. Such as a person, earning 1,500 will pay $200 taxes and I earning $2,000 will also pay $200? The cap on the bracket is $2,500 and if you make $2,501 you will be tax $300
Really confuse here. I might be going about this all wrong. Please help me to understand the average person income tax?