Update for the 2015 taxation year
what are you supporting the tax, and what does it really mean?
your tax bracket, roughly, is the tax rate you pay on your highest dollar of taxable income.
your tax bracket is the not the tax rate you pay on all of your income after adjustments, deductions and exemptions.
your tax bracket determines the amount of your tax increases on income if you earn an extra dollar of income (ignoring the effects of rounding.)
We have tax brackets in the United States because we have a progressive tax system on income. This means more money you make, a higher tax rate you pay. Your tax bracket becomes progressively higher.
The progressive rates are based on the concept that high-income taxpayers can afford to pay a higher tax rate.
low-income taxpayers to pay not only lower overall taxes, but a lower percentage of income they have.
This is how the work of tax brackets, example
Let's say you are single with no dependents, and your taxable income is $ 9,000.
Your marginal tax rate, according to the table of tax brackets for federal income below, is 10%. You pay $ 00 in income tax. It's simple.
W hat if your taxable income is $ 19,000?
By filing single, you are now in the tax bracket of 15%. This does not mean that you pay 15% on all your earnings, however.
You pay 10% on the first $ 9,225, plus 15% of the amount over $ 9,225.
This is the calculation:
| First tax bracket: $ 9,225 x 10% = | $ 922.50 |
| second tax bracket ($ 19,000 - $ 9,225) X 15% = | $ 1,466.25 |
| tax on total income: | $ 2,388.75 |
Find your tax bracket in the following table depending on your filing status and income in 2015:
federal tax brackets income
Tax Year 2015
| tax rate | single filers | Married filing jointly or qualifying widow ( ve) | Married filing separately | household head |
|---|---|---|---|---|
| 10% | Up to $ 9,225 | Up to $ 18,450 | Up to $ 9,225 | Up to $ 13,150 |
| 15% | $ 9,226 - $ 37,450 | $ 18,451 - $ 74.00 | $ 9,226 - $ 37,450 | $ 13,151 $ - 50,0 |
| 25% | $ 37,451 - $ 0,750 | $ 74.01 - $ 151.0 | $ 37.451 - $ 75.0 | $ 50,201 - $ 129,0 |
| 28% | $ 0.751 - $ 189.300 | $ 151,201 - $ 230,450 | $ 75.601 - $ 115.225 | $ 129,601 - $ 209.850 |
| 33% | $ 189,301 - $ 411,500 | $ 230,451 - $ 411,500 | $ 115,226 - $ 205,750 | $ 209,851 - $ 411.500 |
| 35% | $ 411,501 - $ 413,0 | $ 411,501 - $ 464,850 | $ 205,751 - $ 232,425 | $ 411,501 - $ 439,000 |
| 39.6% | $ 413,201 or more | $ 464,851 or more | $ 232,426 or more | $ 439.001 or more |
tax Year 2016
| tax rate | single filers | Married filing jointly or widower qualification (ve) | Married filing separately | household head |
|---|---|---|---|---|
| 10% | Up to $ 9,275 | Up 'at $ 18,550 | Up to $ 9,275 | Up to $ 13,250 |
| 15% | $ 9,276 $ - 37650 | $ 18,551 - $ 75,300 | $ 9,276 - $ 37,650 | $ 13,251 - $ 50,400 |
| 25% | $ 37,651 - $ 91.150 | $ 75.301 - $ 151.00 | $ 37,651 - $ 75,950 | $ 50.401 - $ 130.150 |
| 28% | $ 91,151 - $ 10,150 | $ 151,01 - $ 231,450 | $ 75.951 - $ 115.725 | $ 130,151 - $ 210,800 |
| 33% | $ 10,151 - $ 413.350 | $ 231,451 - $ 413,350 | $ 115,726 - $ 206,675 | $ 210,801 - $ 413,350 |
| 35% | $ 413,351 - $ 415.050 | $ 413,351 - $ 466,950 | $ 206,676 - $ 233,475 | $ 413,351 - $ 441,000 |
| 39.6% | $ 415.051 or more | $ 466,951 or more | $ 233,476 or more | $ 441.001 or more |
Discover the IRS tax bracket you are. Estimate your tax rate here .
Busting a myth tax bracket
Some people think if they earn more money, they are in a higher tax bracket.
they think they pay more taxes and may actually have less money on than they would if they earned less.
Using the prior example, you can see that this is not true.
Every dollar you earn only affects the tax rate on additional income. It does not change the tax rate you pay on the money in lower tax brackets.
Unless you are in the section of the lower tax, you have a two or more tax brackets.
If you're in the tax bracket of 25%, for example, you pay tax at three different rates - 10%, 15% and 25% -. at different levels of your income
on the basis of tax brackets, you still have more money after taxes when you earn more.
Of course, the tax rates are not the only factor in your final tax bill.
when you have a higher income, you may lose tax benefits such as education credits, this phase at higher levels of income.
It pays to use TaxAct as a planning tool to see how different income levels affect your tax benefits and final tax bill.
Use your tax rate to make better decisions
For example, say you plan to work overtime and make an additional $ 1,000.
If you know that you are in the tax bracket of 25%, you'll pay $ 250 in income tax on this money.
You must also pay 7.65% in Social Security and Medicare withholding the employee, plus state taxes and other mandatory deductions.
Earn an additional $ 1,000 is a great idea, but you do not want to be surprised when you discover that a third or more of your salary goes to taxes.
If you are considering making money or in-kind contributions by the end of the year, knowing that your tax bracket allows you to determine how your contribution will save the tax, assuming you are already itemize your deductions.
For example, if you're in the tax bracket of 25%, every $ 100 you contribute to charity you save $ 25 in federal income tax.
Knowing your tax rate is also useful when you consider making a contribution to the pension plan.
If you contribute to a 401 (k) or traditional IRA traditional plan, you will reduce your state and federal income taxes for that year. This makes your contribution now more affordable.
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