Determining Your Tax Bracket
Be aware that levy requirements change from year to year
. In 1913, the 16th Amendment to the constitution was ratified, making federal income tariff a permanent means of collecting revenue from people who lived and worked in the United States.
This first system of taxes featured categories that were based upon salary levels. The percentages that corresponded to these groups were adjusted in 1986 and have been standard ever since.
There are six different levels of salary taxation. These include 10, 15, 25, 28, 33 and 35 percent.
The more a person makes, the higher his specific tariff class. In a progressive levy system the groups are the cutoff values after which income is taxed at a higher rate.
The 10 percent tax bracket is for people earning the lowest salary. The first tariff group applies to single filers and married couples registering separately up to $8,375.
Head-of-household filers are in the 10 percent class for up to $11,950. Joint filers are in the 10% class up to $16,750.
For income above the 10 percent category, single and married couples filing separately are in the 15 percent class up to $34,000. Head-of-household filers are in the 15% group up to $45,550, and joint filers are in this bracket up to $68,000.
For salary above the 15 percent category, single filers are in the 25% class up to $82,400. Married couples registering separately are in this group up to $68,650.
Head-of-household filers are in the 25 percent class up to $117,650, and joint filers are in this bracket up to $137,300. Single filers up to $171,850 fall into the 28% tax category.
Married couples filing separately are in this class if they make up to $171,850. Head-of-household filers with income up to $190,550 and joint filers with salary up to $209,250 fall into this group.
Like all brackets, the 28 percent tax rate applies only to income above the other tariff brackets. Married couples who are registering separately are in the 33% tax class with salary up to $186,825.
The other three levy filing statuses are all in the 33 percent tariff group with salary up to $373,650. The 35% levy rate applies to all income above the limits for the 33 percent tax category.
The Internal Revenue Service adjusts the class a little each year to account for inflation. Any salary that is generated within a given bracket is taxed at that rate, to avoid situations where earning an extra small amount of money can cost someone a lot in taxes.
To establish which group you belong in, you have to have a registering status. There are four filing statuses.
Your registering status will depend on your living situation at the end of the year. The "single" filing status is for people who are unmarried at the end of the year.
The "joint" filing status is for married couples registering together. The "head of household" filing status, often called HOH, is for people who pay more than half the cost of a dependent's home and list at least one relative as a dependent.
The "married filing separate" registering status is for married couples who decide to file separate returns. Next, you need to determine what your taxable salary is.
The figure used to calculate tariff groups is a person or couple's taxable income. Taxable income is typically any monies earned for working or for benefits that are received, though the IRS identifies a few areas of exception each year.
The levy class ranges are divided by salary and levy filing status. Those who are single or who are married and filing separately use one table.
Separate tables exist both for those who are married and registering jointly and heads of a household in which the spouse is not employed. Make sure you are filed in the proper class ranges.
Penalties can be steep for filing under the wrong tariff group. Any questions concerning what category a person or couple will be taxed at should be posed to the IRS or to an experienced tax accountant.
by: Jack Landry
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