It’s my understand that if you’re a tax independent, if you make less than $6000, you don’t pay any federal income tax. If it’s automatically withheld, you get it all back. Correct me if that’s wrong.
My question is, if you make $6001, do you get taxed on $6001 retroactively, or do you get taxed on $1?
Assuming your figures are correct and talking USA, you can say $1.
But it’s not that simple. Taxes never are.
I’ll guess that the standard deduction and personal exemption total $6000, as you seem to indicate (and that seems right). This means that for taxation purposes, $6000 is deducted from your income, leaving $1 taxable at whatever that bracket is.
In the USA we have a tiered system. This means (1) the more you make the higher your tax rate [the bracket] and (2) you are only taxed at that rate for income that falls into that bracket. So for example, let’s say we have 10% taxation up to $10,000, 20% up to $20,000, and 30% over that. You made $36,000 so your taxable income is $30,000. You’ll pay 10% of $10,000, plus 20% of $10,000, plus 30% of $10,000, or $6000 in taxes.
It really is that simple, but where it gets muddy is in the definition of what is taxable income.
Whew! I was afraid for a minute that they were gonna start taxing us for being dumb, making stupid remarks, or acting like a klutz.
What a relief!
Ah, ok, thanks. My question, I guess, really was whether the whole years worth of income was taxed based on where the total ended up in the bracket, or if it was taxed according to the individual brackets it fell in. Thanks for the answer.
I was wondering if it would be advantageous for me to quit my job when I hit $5900 in pay, too 
For more information, let’s go to the source (for US taxpayers). The IRS already has 2002 tax forms up on their web site. If you examine the 1040EZ form (pdf file), you’ll see line 4 is your “adjusted gross income.” This is the total amount of money you made all year. From that, you subtract deductions and exemptions ($4700 + $3000 = $7700 if you’re single) to get your “taxable income” (line 6). This is the amount of money you pay taxes on. Then take a look at the instructions for form 1040EZ ('nother pdf file); specifically, look at the “tax table” starting on page 25. This shows you how much tax you’ll have to pay based on your taxable income (NOT gross income).
So, for example, if you made $8000 this year, you pay tax only on the last $300, and the total tax you pay (from the tax table) is $31. Whether or not you physically cut a check come next April will depend on how much money, if any, was withheld from your paycheck. Of course, all this changes if you’re married, or someone else’s dependent, or you’ve got odd income sources, or lots of deductions, or whatever. But the basic structure is the same: you start with total, gross income; subtract deductions and exemptions to get taxable income; and figure tax based on the latter.
Tax rates in the US are marginal rates. That means they only apply to the income generated after that minimum income level has been met. So if a 10% tax rate kicks in at an income over $5,000 (for example), you would be taxed at 10% of the income you make over $5,000. If the next marginal rate of 15% kicks in at the $10,000 level, then you would now start being taxed at that higher rate on the income over $10,000. This sounds fairly complicated. That is why the federal tax booklets come with tax tables, instead of having people try to calculate the correct tax.