How to figure out tax brackets

This quick guide will help you figure out how much you owe

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Each year changes are made to federal tax brackets. Tax brackets are the cut-offs in taxable income before your tax rate jumps to the next higher rate. Adjustments are made for inflation and the cost-of-living. There are seven federal tax brackets. The first income bracket is taxed at a 10% rate. The top bracket is taxed at a 39.6% rate. Note: In the U.S. we pay marginal tax rates so even if you earn a million dollars a year, your income in the first bracket is still taxed at a 10% rate, just like everyone else.

There are a different set of tax brackets for separate filings statuses. For example, if you’re single you have different tax brackets than if you’re married filing jointly. Below are the tax brackets for each filing status that should be used when filing your 2014 taxes, which are due by April 15, 2015.

2014 tax brackets: Individual Taxpayers

  • If your taxable income isn’t over $9,075, your rate is 10%.
  • If your taxable income ranges from $9,075 to $36,900, you pay $907.50 plus 15% of any amount over $9,075.
  • If your taxable income is $36,900 to $89,350, you pay $5,081.25 plus 25% of any amount over $36,900.
  • If your taxable income ranges from $89,350 to $186,350, you pay $18,193.75 plus 28% of any amount over 89,350.
  • If your taxable income is $186,350 to $405,100, you pay $45,353.75 plus 33% of any amount over $186,350.
  • If your taxable income is $405,100 to $406,750, you pay $117,541.25 plus 35% of any amount over $405,100.
  • If your taxable income is over $406,750, you pay $118,118.75 plus 39.6% of any amount over $406,750.

2014 tax brackets: Married Filing Jointly

  • If your taxable income is up to $18,150, your rate is 10%.
  • If your taxable income is $18,150 to $73,800, you pay $1,815 plus 15% of the amount over $18,150.
  • If your taxable income is $73,800 to $148,850, you pay $10,162.50 plus 25% of the amount over $73,800.
  • If your taxable income is $148,850 to $226,850, you pay $28,925 plus 28% of the amount over $148,850.
  • If your taxable income is $226,850 to $405,100, you pay $50,765 plus 33% of the amount over $226,850.
  • If your taxable income is $405,100 to $457,600, you pay $109,587.50 plus 35% of the amount over $405,100.
  • If your taxable income is over $457,600, you pay $127,962.50 plus 39.6% of the amount over $457,600.

2014 tax brackets: Married Filing Separately

  • If your taxable income is up to $9,075, your rate is 10%.
  • If your taxable income is $9,075 to $36,900, you pay $907.50 plus 15% of the amount over $9,075.
  • If your taxable income is $36,900 to $74,425, you pay $5,081.25 plus 25% of the amount over $36,900.
  • If your taxable income is $74,425 to $113,425, you pay $14,462.50 plus 28% of the amount over $74,425.
  • If your taxable income is $113,425 to $202,500, you pay $25,382.50 plus 33% of the amount over $113,425.
  • If your taxable income is $202,550 to $228,800, you pay $54,793.75 plus 35% of the amount over #202,550.
  • If your taxable income is over $228,800, you pay $63,981.25 plus 39.6% of the amount over $228,800.

2014 tax brackets: Head of Household

As always, talk with your accountant, tax preparation specialist or check out IRS.gov to make sure you take advantage of all the deductions and credits available to you and your family.

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Source: investorplace.com

Category: Taxes

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