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Understanding where you fall in terms of personal tax brackets is one of the first steps to knowing how much you will owe in personal income taxes by year's end. Tax brackets are defined as being a range of incomes that are taxed at a specific rate. As your yearly income changes, or your marital situation changes, your tax bracket will also change. Here is how to discover where you fall.
Finding Your Tax Bracket
Finding your own personal tax bracket is relatively easy. The first thing that you are going to need to know is what your taxable income is, which is your adjusted gross income or AGI minus any standard deductions or itemized deductions. Let us say for example that you have an income of $70,000 as your taxable income. The next step is to know your filing status.
Filing Status
There are four types of filing statuses, which are single, head of household, married filing separately and married filing jointly. Let us say for example that you are single. The next thing to look at is your individual tax bracket. Here is a look at the 2008 tax year tax brackets for each of the filing statuses.
Single Filing Status
Taxable incomes between $0 and $8,025 fall into the 10 % tax bracket. Taxable incomes between $8,025 and $32,550 fall into the 15 % tax bracket. Taxable incomes between $32,550 and $78,850 fall into the 25 % tax bracket. Taxable incomes between $78,850 and $164,550 fall into the 28 % tax bracket. Taxable incomes between $164,550 and $357,700 fall into the 33 % tax bracket. Taxable incomes that are over $357,700 fall into the 35 % tax bracket.
In the example, your taxable income amount was $70,000 and you were filing as single, meaning that your tax bracket is the 25 % rate. Here is another example using a married couple:
Married Filing Status
Taxable incomes between $0 and $16,050 fall into the 10 % tax bracket. Taxable incomes between $16,050 and $65,100 fall into the 15 % tax bracket. Taxable incomes between $65,100 and $131,450 fall into the 25 % tax bracket. Taxable incomes between $131,450 and $200,300 fall into the 28 % tax bracket. Taxable incomes between $200,300 and $357,700 fall into the 33 % tax bracket. Taxable incomes that are more than $357,700 fall into the 35 % tax bracket.
In this example, let us say that a married couple has a combined taxable income that is $200,000. In this example if they were to file "married, filing jointly", they would fall into the 28 % tax bracket range.
Understanding where you stand in terms of your tax bracket is the first step to knowing how much you are going to earn or pay in terms of your income taxes. If you end up making less money than anticipated, you may end up receiving a federal income tax return because you will fall into a lower tax bracket. If you end up moving into a higher tax bracket, you may end up paying more at the end of the year instead.
Finding Your Tax Bracket
Finding your own personal tax bracket is relatively easy. The first thing that you are going to need to know is what your taxable income is, which is your adjusted gross income or AGI minus any standard deductions or itemized deductions. Let us say for example that you have an income of $70,000 as your taxable income. The next step is to know your filing status.
Filing Status
There are four types of filing statuses, which are single, head of household, married filing separately and married filing jointly. Let us say for example that you are single. The next thing to look at is your individual tax bracket. Here is a look at the 2008 tax year tax brackets for each of the filing statuses.
Single Filing Status
Taxable incomes between $0 and $8,025 fall into the 10 % tax bracket. Taxable incomes between $8,025 and $32,550 fall into the 15 % tax bracket. Taxable incomes between $32,550 and $78,850 fall into the 25 % tax bracket. Taxable incomes between $78,850 and $164,550 fall into the 28 % tax bracket. Taxable incomes between $164,550 and $357,700 fall into the 33 % tax bracket. Taxable incomes that are over $357,700 fall into the 35 % tax bracket.
In the example, your taxable income amount was $70,000 and you were filing as single, meaning that your tax bracket is the 25 % rate. Here is another example using a married couple:
Married Filing Status
Taxable incomes between $0 and $16,050 fall into the 10 % tax bracket. Taxable incomes between $16,050 and $65,100 fall into the 15 % tax bracket. Taxable incomes between $65,100 and $131,450 fall into the 25 % tax bracket. Taxable incomes between $131,450 and $200,300 fall into the 28 % tax bracket. Taxable incomes between $200,300 and $357,700 fall into the 33 % tax bracket. Taxable incomes that are more than $357,700 fall into the 35 % tax bracket.
In this example, let us say that a married couple has a combined taxable income that is $200,000. In this example if they were to file "married, filing jointly", they would fall into the 28 % tax bracket range.
Understanding where you stand in terms of your tax bracket is the first step to knowing how much you are going to earn or pay in terms of your income taxes. If you end up making less money than anticipated, you may end up receiving a federal income tax return because you will fall into a lower tax bracket. If you end up moving into a higher tax bracket, you may end up paying more at the end of the year instead.
