Determine Your Federal Tax Bracket

Taxpayers in the United States pay federal income tax according to how much taxable money they make each year. The tax bracket, listed in a tax table or tax schedule, tells you approximately how much tax you will pay. It is important to note that your tax bracket is not the percentage of your income that you will pay in taxes. The actual amount you will pay in taxes is found through a formula when you complete your annual tax filing. However, by finding your taxable income and tax bracket, you will be able to ballpark your taxes and properly evaluate certain financial decisions.

Steps

Estimating Your Income

1. Use the correct form. In order to determine your taxable income, start by selecting the correct IRS 1040 form to file with. For example, there are forms 1040EZ and 1040A that rely on meeting certain conditions, like having under $100,000 in taxable income. See the IRS website for more information.
2. Estimate your adjusted gross income. Your adjusted gross income will be the amount you will make in the current year, minus any pre-tax adjustments to your income, like IRA or 401 K contributions. Check your pay stubs, last year's W-2 or last year's tax return to get a more accurate estimate for the money you're likely to make. Taxable income from the last year you file can be found on:
   • Line 43, if you filed Form 1040.
   • Line 27, if you filed Form 1040A.
   • Line 6, if you filed Form 1040EZ.
3. Figure out your deductions. If you plan to itemize your deductions, you may want to do a general estimate based on last year's return, if your expenses are similar. If you don't plan to itemize your deductions, determine your standard deduction amount based on official IRS standards.
   • Standard deduction amounts change from year to year, and you'll always need to double-check against the official IRS numbers. In tax year 2016, the standard deduction for:
     • Single or married filing separately was $6,300
     • Married or qualified widow(er)s was $12,600
     • Head of household was $9,300
   • You also need to determine your personal deduction threshold each year you file taxes, if necessary. The personal deduction threshold set in 2016 is currently $4050.
4. Subtract your deductions. Once you've subtracted your deductions from your adjusted gross income, the result is your taxable income. You will use this figure to determine your tax bracket.

Choosing a Bracket

1. Determine your filing status. The IRS establishes different tax bracket depending on your filing status. Your filing status is where you indicate whether you are filing as a single person, married couple, or head of household. Figure out your filing status, then scroll down until you see the taxable income amount you calculated in the first section, and learn what percentage of that income will be taxed.
2. Determine if you are filing as single or married filing separately. Use the "Single" filing status if you are unmarried, divorced or legally separated as of the last day of the current tax year. If your taxable income is:
   • Less than $9,075, your tax bracket is 10%
   • Between $9,075 and $36,900, your tax bracket is 15%
   • Between $36,900 and $89,350, your tax bracket is 25%
   • Between $89,350 and $186,350, your tax bracket is 28%
   • Between $186,350 and $405,100, your tax bracket is 33%
   • Between $405,100 and $406,750, your tax bracket is 35%
   • Over $406,750, your tax bracket is 39.6%
3. Determine if you are filing as married or as a qualified Widow(er). Use the "Married" filing status if you plan to file your taxes jointly with your spouse. This means you will use your combined income as the determination of your tax bracket. You can also use this bracket if your spouse died during the current tax year. Use the "Qualified widow(er)" if your spouse died in the previous tax year, you filed jointly the year before, and have at least one dependent. If your taxable income is:
   • Less than $18,150, your tax bracket is 10%
   • Between $18,150 and $73,800, your tax bracket is 15%
   • Between $73,800 and $148,850, your tax bracket is 25%
   • Between $148,850 and $226,850, your tax bracket is 28%
   • Between $226,850 and $405,100, your tax bracket is 33%
   • Between $405,100 and $457,600, your tax bracket is 35%
   • Over $457,600, your tax bracket is 39.6%
4. Determine if you are filing as a head of household. Use the "Head of Household" filing status if you are unmarried, have at least one dependent living with you and if you provide over half of the money required to keep up your household. You can also file for this if you provide over half the income for the household, have at least one dependent and your spouse did not live with you for the last six months of the year. If your taxable income is:
   • Less than $12,950, your tax bracket is 10%
   • Between $12,950 and $49,400, your tax bracket is 15%
   • Between $49,400 and $127,550, your tax bracket is 25%
   • Between $127,550 and $206,600, your tax bracket is 28%
   • Between $206,600 and $405,100, your tax bracket is 33%
   • Between $405,100 and $432,200, your tax bracket is 35%
   • Over $432,200, your tax bracket is 39.6%

Tips

• The number listed as your tax bracket percentage is actually your marginal tax percentage. That is, it is the percentage you would pay of each additional dollar you made. To calculate your federal taxes, you would need to find the amount you owe within your current tax bracket and also in every bracket below that one and add them up. For example, if you're married and you have a taxable income of $100,000, you split it up as follows:
  • The first $18,150 of your income is taxed in the 10% tax bracket, resulting in $1,815 in tax.
  • The next tier of income of $55,649 ($18,151 to $73,800) is taxed in the 15% tax bracket, resulting in $8,347.35 in tax.
  • Then the highest tier of $26,199 ($73,801 to $100,000) is taxed at 25%, for $6,549.75.
  • Then add the taxes for each bracket up to achieve a total number.
• Knowing your tax bracket is also important for estimating the impact of certain deductions. For example, someone in the 33% tax bracket will save 33 cents on federal taxes for every dollar spent on tax-deductible expenses, like mortgage interest or charitable donations.

Warnings

• The US tax brackets change from year to year. You will need to consult your tax preparation expert or IRS.gov for up to date information at the end of each tax year.
• Do not calculate your taxes from your tax bracket percentage. The bracket rates described in this article are marginal rates. As such they are applied only to the income that falls within that “bracket” of taxable income, then all taxes so calculated are added up to get the total. For example, if you made $37,000, you are only taxed 10% on the first $9,275. The additional $27,725 is taxed 15%. These two values are added together to determine how much you may owe in federal income taxes.

Related Articles

• Calculate Federal Taxes in Canada
• Find Federal Income Tax Forms Online
• Amend a Federal Tax Return
• Calculate Payroll Taxes

Sources and Citations

See also

• Turn Someone in to the IRS
• Fill Out a US 1040EZ Tax Return
• Annualize
• Find a Federal Tax ID Number
• Fill Out a W‐4
• Account for Fixed Assets
• Calculate Tax on Bonus Payments
• Pay Less in Taxes
• Complete a W‐9 Tax Form
• Get a Copy of Your W‐2 from the IRS

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