TAX TABLE CALCULATION FOR SOFTWARE DEVELOPERS

Taxable income range		Base	Rate	Tax years
At least	But less than
$0	$2,000	$0	0	2010 -
2,000	5,000	0	.022
5,000	10,000	66	.039
10,000	20,000	261	.048
20,000	25,000	741	.052
25,000	60,000	1,001	.0555
$60,000		$2943.50	.0695	2010 - 2011
			.0675	2012 - 2013
			.0595	2014 -

The basic tax calculation is Base + (Rate * (Income - Range start)

For example, the tax on $12,345 is	261 + (.048 * (12345-10000))
=	261 + (.048 * 2345)
=	261 + 112.56
=	373.56, which would be rounded to $374.

However, $374 is not listed in the tax table.

For taxable income up to $60,000, the amount listed in the tax table is calculated on the middle of a $50 range.  For taxable income over $60,000, the tax amount is not listed in the table, and should be calculated on the exact income amount.

If the calculated tax amount ends in .50 or higher, it is rounded up to the next whole dollar.

Examples

Taxable income	Calculate tax on	Tax amount	Rounded tax amount	Tax years
12,345	12,325	261 + 111.6	373	2010 - 2011
27,555	27,575	1001 + 142.9125	1144
75,000	75,000	2943.50 + 1042.50	3986	2010 - 2011
		2943.50 + 1012.50	3956	2012 - 2013
		2943.50 + 892.50	3836	2014 -
82,605	82,605	2943.50 + 1571.05	4515	2010 - 2011
		2943.50 + 1525.84	4469	2012 - 2013
		2943.50 + 1345.00*	4289	2014 -

^*Note that the intermediate result, 22605 * 0.0595 = 1344.9975, is rounded to the penny first, then added to 2943.50.  If this is not done, the result will not match our calculations, because 2943.50 + 1344.9975 = 4288.4975, which would be rounded to 4288.


Direct any questions to david.g.smith@state.de.us.

Last Updated: Friday, 07-Oct-2011 12:05:41 EDT