How to Calculate the Difference in Tax Rates

When you know your income tax rate, you can then calculate your tax liability.  The income tax rate will take into consideration expected and unexpected income, as well as investment income.  Once you know how much to set aside for taxes, you can better plan your other expenses.

• Calculate your taxable income.  You will need to know how much taxable income you have, in order to calculate your taxes.  You can use your W2 form, provided by your employer to calculate your taxable income, making sure to add in any other income, such as investments.


• Calculate the tax due on your taxable income between $0 and $8,375.  All income in this income range will be taxed at a rate of 10 percent.


• Calculate the tax due on your taxable income between $8,375 and $34,000.  All income in the income range between $8,375 and $34,000 will be taxed at a rate of 15 percent.


• Calculate the tax due on your taxable income between $34,000 and $82,400.  All income in the income range between $34,000 and $82,400 will be taxed at a rate of 25 percent.


• Calculate the tax due on your taxable income between $82,400 and $171,850. All income in the income range between $82,400 and $171,850 will be taxed at a rate of 28 percent.


• Calculate the tax due on your taxable income between $171,850 and $373,650.  All income over $373,650, in terms of taxable income, is taxed at the marginal rate of 33 percent.


• Calculate the tax due on your taxable income between over $373,650.  All income over $373,650 in terms of taxable income is taxed at the marginal rate of 35 percent.