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Taxable income
Lower Income threshold for bracket 2
Lower Income threshold for bracket 3
Income tax rate for bracket 2
Income tax rate for bracket 3
Income tax
$120,000
$40,000
$100,000
20%
25%
$17,000
$120,000
$40,000
$100,000
20%
25%
$17,000
<== Income
<== Thresh2
<== Thresh3
<== Rate2
<== Rate3
Decision Tree for Calculating Income Tax with Three Tax Brackets
Yes
Tax = 0