How to Figure Tax Brackets
Your tax bracket is the percentage at which your wages will be taxed. Income taxes in the United States are incremental and are based on what you make and what bracket you fall into. There is a simple two-step process to figure out your tax bracket. Charitable contributions and retirement investments are two ways to avoid paying more in taxes.
- Figure
out your total annual salary, including earnings, wages, winnings,
gifts and other income. Looking on your pay stubs, 1099 or receipts
from lottery winnings will help you find your annual income amount. - Add
your income amounts together. Be sure the math is correct, if the
math is incorrect, it could affect what income bracket you fall in. - Determine
your filing status. This is based on your marital status and will be
single, married or married filing jointly. If you get married on
December 31, 2010-you are considered married for the entire year of
2010. - Look
at the IRS tax table for the current tax year. Brackets are based on
your filing status and income, be sure you look at the right table. - Look
up the federal tax rate schedules on the IRS website. The website
will list the tax rates, and they do not change annually, but are
still relevant to figuring out what tax bracket you fall in. - Whether
looking online or at a print publication, locate the line where your
gross annual income falls. If your income is $30,000 you find the
appropriate line and find out that your tax rate is $7,825 or 15
percent.