How do i know what tax bracket i fall into

how do i know what tax bracket i fall into

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Find out how much you make a year. You can either go to your most recent tax returns to see what your adjusted gross income is, or you can add up how much you're going to make this year and estimate your deductions. Either way, or even if you just use your income before deductions, you can still get a pretty good idea of your tax bracket.

Find out what the bracket is and what it means. There are currently five tax brackets for your income taxes: 10 percent, 15 percent, 25 percent, 28 percent, 33 percent and 35 percent. Each bracket exists for the first portion of your income that is defined by the bracket. The 10 percent covers the first few thousand dollars of your income and then the fifteen percent covers the next few thousand dollars of your

income and so on until you reach the level of income you make. The last tax bracket that you use is your marginal tax bracket and what people refer to as your tax bracket.

Break down your income on the bracket. Using the 2008 federal tax bracket for single people, the brackets are broken down by the first $8,025 taxed at the 10 percent rate, the amount of your income from $8,025 to $32,550 taxed at 15 percent, the amount between $32,550 and $78,850 taxed at 25 percent, the amount between $78,850 and $164,550 taxed at 28 percent, the amount between $164,550 and $357,700 taxed at 33 percent, and everything above that taxed at 35 percent. If you make $100,000, your marginal tax bracket would be at the 28 percent but not all of your income would be taxed at 28 percent, just the amount over $78,850.

Source: ehow.com

Category: Taxes

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