Tag: Tax Brackets

What is a tax bracket, and what does it mean for you? The United States federal income tax utilizes a progressive - or tax bracket - system to determine how much singles or married couples will pay in yearly taxes. Since the implementation of the American Taxpayers Relief Act, the IRS divided the taxpayer population into seven tax brackets, determined by the amount of personal income earned within the space of a year. The more money you make, the higher…

As your income increases, what happens to tax brackets and the percentage the IRS takes? As your income rises, you move into a higher and higher tax brackets and pay a larger percentage of your income in taxes. This system is the progressive taxation design of our U.S. tax system. Today, the tax code has seven separate tax brackets, ranging from the lowest bracket of 10% for low-income earners to the top tax bracket of 39.6% for the highest earners.…