Tax Day is rapidly approaching and, for many people, their impending IRS filing inspires a sense of anxiety. If you're someone who is intimidated by the prospect of doing taxes, having some basic information squared away before you begin can help ease this worry. For example, you might currently be wondering what tax bracket you're in. Well, look no further. This guide will help you figure out exactly which income bracket you fall into.
Before determining your tax bracket, it is helpful to know some basic background information and key terminology. The federal government currently has seven different income tax brackets and related tax rates: 10%, 15%, 25%, 28%, 33%, 35%, and 39.6%. Your tax bracket is determined both by how much taxable income you have and the status under which you file.
Some common status filings on tax forms are: single, married filing jointly, married filing separately, and head of household. The first three statuses are relatively self explanatory. The final status, head of household, typically means you are not married and you pay for more than half of the cost of maintaining a household for yourself and another qualifying person.
Generally speaking, your taxable income is your gross income (all of the income you've received from any sources) minus any applicable deductions and exemptions.
Once you know your taxable income and your filing status, you should be able to determine your tax bracket and how much tax you owe. The chart below shows the seven different tax brackets, featuring the taxable income range for each filing status that qualifies you for that bracket.
Do keep in mind that you only have to pay applicable taxes on the parts of your income that fall within each bracket. For example, if you had $10,000 in taxable income, which would put you in the 15% bracket, you would actually only have to pay 15% on $675, since the 15% bracket starts at $9,326. You would owe only 10% taxes on the remaining $9,325.
Last year, the Tax Policy Center reported that around 80 percent of Americans fall in the 15 percent bracket or lower. Thus, for most people, the first two items in this list will be most helpful.
10% Marginal Tax Rate
Single Taxable Income
- Taxable Income Range: $0 – $9,325
- Tax Owed: 10%
Married Filing Jointly
- Taxable Income Range: $0 - $18,650
- Tax Owed: 10%
Married Filing Separately
- Taxable Income Range: $0 - $9,325
- Tax Owed: 10%
Head Of Household
- Taxable Income Range: $0 - $13,350
- Tax Owed: 10%
15% Marginal Tax Rate
Single Taxable Income
- Taxable Income Range: $9,326 - $37,950
- Tax Owed: $932.50 plus 15% of the amount over $9,325
Married Filing Jointly
- Taxable Income Range: $18,651 - $75,900
- Tax Owed: $1,865 plus 15% of the amount over $18,650
Married Filing Separately
- Taxable Income Range: $9,326 - $37,950
- Tax Owed: $932.50 plus 15% of the amount over $9,325
Head Of Household
- Taxable Income Range: $13,351 - $50,800
- Tax Owed: $1,335 plus 15% of the amount over $13,350
25% Marginal Tax Rate
Single Taxable Income
- Taxable Income Range: $37,951 - $91,900
- Tax Owed: $5,226.25 plus 25% of the amount over $37,950
Married Filing Jointly
- Taxable Income Range: $75,901 - $153,100
- Tax Owed: $10,452.50 plus 25% of the amount over $75,900
Married Filing Separately
- Taxable Income Range: $37,951 - $76,550
- Tax Owed: $5,226.25 plus 25% of the amount over $37,950
Head Of Household
- Taxable Income Range: $50,801 - $131,200
- Tax Owed: $6,952.50 plus 25% of the amount over $50,800
28% Marginal Tax Rate
Single Taxable Income
- Taxable Income Range: $91,901 - $191,650
- Tax Owed: $18,713.75 plus 28% of the amount over $91,900
Married Filing Jointly
- Taxable Income Range: $153,101 - $233,350
- Tax Owed: $29,752.50 plus 28% of the amount over $153,100
Married Filing Separately
- Taxable Income Range: $76,551 - $116,675
- Tax Owed: $14,876.25 plus 28% of the amount over $76,550
Head Of Household
- Taxable Income Range: $131,201 - $212,500
- Tax Owed: $27,052.50 plus 28% of the amount over $131,200
33% Marginal Tax Rate
Single Taxable Income
- Taxable Income Range: $191,651 - $416,700
- Tax Owed: $46,643.75 plus 33% of the amount over $191,650
Married Filing Jointly
- Taxable Income Range: $233,351 - $416,700
- Tax Owed: $52,222.50 plus 33% of the amount over $233,350
Married Filing Separately
- Taxable Income Range: $116,676 - $208,350
- Tax Owed: $26,111.25 plus 33% of the amount over $116,675
Head Of Household
- Taxable Income Range: $212,501 - $416,700
- Tax Owed: $49,816.50 plus 33% of the amount over $212,500
35% Marginal Tax Rate
Single Taxable Income
- Taxable Income Range: $416,701 - $418,400
- Tax Owed: $120,910.25 plus 35% of the amount over $416,700
Married Filing Jointly
- Taxable Income Range: $416,701 - $470,700
- Tax Owed: $112,728 plus 35% of the amount over $416,700
Married Filing Separately
- Taxable Income Range: $208,351 - $235,350
- Tax Owed: $56,364 plus 35% of the amount over $208,350
Head Of Household
- Taxable Income Range: $416,701 - $444,550
- Tax Owed: $117,202.50 plus 35% of the amount over $416,700
39.6% Marginal Tax Rate
Single Taxable Income
- Taxable Income Range: $418,401 or more
- Tax Owed: $121,505.25 plus 39.6% of the amount over $418,400
Married Filing Jointly
- Taxable Income Range: $470,701 or more
- Tax Owed: $131,628 plus 39.6% of the amount over $470,700
Married Filing Separately
- Taxable Income Range: $235,351 or more
- Tax Owed: $65,814 plus 39.6% of the amount over $235,350
Head Of Household
- Taxable Income Range: $444,551 or more
- Tax Owed: $126,950 plus 39.6% of the amount over $444,55
Recent research has found that millennials are typically very intimidated by the prospect of doing their taxes. In 2016, a survey conducted by NerdWallet and Harris Poll found that 80 percent of Americans ages 18 to 34 are worried about doing their taxes. The survey noted that some of their primary concerns consisted of not getting their full refund and/or making a mistake on their tax returns. The survey found that millennials tended to worry more about doing their tax returns than older individuals. Indeed, only 60 percent of adults ages 55 and older said they were concerned about filing their returns.
Liz Weston, a NerdWallet columnist who specializes in personal finance, commented on the survey's findings back in 2016. Weston noted that, while the survey results may be surprising, they actually make sense considering the vantage point from which millennials are approaching taxes. As Weston put it:
Who knew so many millennials would be so old-fashioned. But in some ways, it makes sense: Millennials tend to have less experience with a deeply confusing tax code, less cash to seek professional help and less need for the more complicated returns that having children or a mortgage can bring.
Overall, while tax season can certainly be intimidating for millennials (and others), having a good understanding of basic tax knowledge can help increase your comfort level in filing your 2017 return.
