What is my Tax Bracket?

As an individual in the United States, you can expect to be subject to certain income taxes based on the amount of money you make each year. In order to determine exactly what tax bracket you should be classified into, it helps to know that the US has a progressive tax system in which different levels of income earners will be taxed at different rates. Knowing which tax bracket you fall into can help you plan for your taxes and determine the amount of taxes you are expected to pay.

Understanding the Tax System

Under the US tax system, you are considered to be in a particular tax bracket depending on the amount of money you earn. Generally, the more money you make, the higher your tax bracket. There are seven tax brackets in the US – 10%, 12%, 22%, 24%, 32%, 35%, and 37%. Everyone who has taxable income will be taxed at one of these rates and the higher your income, the higher your tax rate.

Typical Tax Brackets

The amount of taxable income will determine which tax bracket you fall into. For example, a single filer earning less than $9,700 would fall into the 10% tax bracket. An individual filing as a single head of household making up to $13,850 would also fall into the 10% tax bracket. At the other end of the spectrum, a single filer making more than $510,300 or a head of household earning more than $436,300 would fall into the 37% tax bracket.

Income Taxes for Joint Filers

If you are filing jointly with your spouse, then you will also need to take into consideration your joint income when determining which tax bracket you belong to. GDP For instance, a joint filing couple earning between $19,400 and $78,950 would generally fall into the 12% tax bracket. If the couple earns a combined taxable income of more than $510,300, then they would fall into the 37% tax bracket.

Factoring in Tax Deductions

It is important to remember that tax deductions can have an effect on your tax bracket. Tax deductions are deductions from your total taxable income which can reduce the amount of income that is subject to taxation. Tax deductions can come from various sources, such as from mortgage interest, charitable giving, and certain business expenses. By taking advantage of these deductions, you can reduce your taxable income and potentially move into a lower tax bracket.

Conclusion
When it comes to determining which tax bracket you should be in, the main factor to consider is your taxable income. Depending on your filing status, the amount of income you are making can have an effect on the tax bracket you should be classified into. It is also important to remember that certain tax deductions can potentially move you into a lower tax bracket, so it is worth exploring what deductions you may be eligible to receive.