Assume that you have a marginal tax rate of 28 percent, a state income tax rate of 4 percent, and have a city income tax rate of 1 percent- The tax for Social Security and Medicare is 7.65 percent. What would be the effective marginal tax rate on your last dollar of earnings?

The basic methods of tax planning are: reducing your overall income, increasing your number of tax deductions throughout the year, and taking advantage of certain tax credits.
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