How can I determine which tax bracket I am in?

Answer 1

For 2007, here are the tax brackets (by annual income) in the U.S.A.

Keep in mind that this is on TAXABLE income, not your gross income. This is meant as an approximate for taxing purposes by employers. Subtract out from your gross pay your allowances for dependants($3,400.00 each), and contributions you may have made to retirement plans such as a 401(k).

Single Person
Taxable income
Over_____But not over_Rate + Percentage__Of excess over
$2,650____$10,120____10%______________$2,650
$10,120___$33,520____$747.00 + 15%_____$10,120
$33,520___$77,075____$4257.00 + 25%____$33,520
$77,075___$162,800___$15,145.75 + 28%___$77,075
$162,800__$351,650___$39,174.75 + 33%__$162,800
$351,650____________$101,469.25 + 35%__$351,650

Married Person
Taxable income
Over_____But not over_Rate + Percentage__Of excess over
$8,000____$23,350____10%______________$8,000
$23,350___$70,700____$1,535.00 + 15%____$23,350
$70,700___$133,800___$8,637.50 + 25%____$70,700
$133,800__$203,150___$24,412.50 + 28%___$133,800
$203,150__$357,000___$43,830.50 + 33%___$203,150
$357,000_____________$94,601.00 + 35%___$357,000

Answer 2

SIMPLIFIED Method: You need to determine your Adjusted Gross Income, then subtract your larger of itemized or standard deduction and then subtract your exemptions (3,300 for each person on your return.)

Then you have your Taxable Income. Based on your taxable income, you can determine your tax bracket.

THe US tax system is progressive, meaning that you if you fall into the 25% tax bracket, not ALL of your Taxable Income is taxed at 25%. Some is taxed at 10%, some is taxed at 15%, and finally some is taxed at 25%. You need a calculator or chart to determine how much tax to pay, unless of course, you are in the 0 tax bracket!

The WealthBuilder
Tax Specialist

Answer 3

You figure out how much income you had total and then look at the little chart on the tax booklet.