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Income Tax Brackets

 See How Tax Brackets & Rates Effect Your Tax Liability

ONLINE Tax tools

Income Tax Brackets 2017 - 2018

Our income tax brackets table below will help you determine your tax bracket and tax rate you will use for preparing your federal tax return.

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IRS Federal Income Tax Brackets and Rates

United States Income Tax Brackets History

In the U.S., federal income tax personal exemptions and standard tax deduction are adjusted for taxpayers and dependents on an annual basis. These annual adjustments account for inflation and result in the adjustment of federal income tax brackets.

While the tax brackets change due to the Bureau of Labor Statistics Consume Price Index for Urban Consumers (CPI-U), legislation may or may not change income tax rates which in turn come into play dictating the outcome of your online income tax preparation.

The number of income tax brackets have changed over the last couple decades with just 3 tax brackets existing in 1992, 5 tax brackets from 1993 thru 2001, and 6 tax brackets from 2002 thru 2012. See table below.

Tax Brackets Rate History

93 - 2000 2001 2002 03 - 2012 13 - Now
    10% 10% 10%
15% 15% 15% 15% 15%
28% 27.5% 27% 25% 25%
31% 30.5% 30% 28% 28%
36% 35.5% 35% 33% 33%
39.6% 39.1% 38.6% 35% 35%

Calculating Your Income Tax Bracket Taxable Income

Total Gross Income is the sum of all taxable income earned during the tax year. This includes your W-2 wages and salaries, cash payment income from side jobs, self employment income and interest earned or capitol gains accrued.

Almost all income is taxable, however, there are a few exemptions your tax preparation software should catch. Examples include:

  • Payments from Social Security to an individual
  • Non-taxable interest on government issued bonds
  • Disability Insurance Payments
  • Employer Provided Insurance
  • Life Insurance Payouts
  • Sale of Principal Residence
  • Up to $3000 of income offset by capitol losses
  • Municipal bond interest
  • Portions of an inheritance... etc...

W-2 wages are the earnings that appear on your employee W-2 form issued by your employer each year in January. The W-2 form also shows the amount withheld by the employer for federal income tax. A copy of the W-2 is sent to the Internal Revenue Service (IRS) and shows your Gross Salary less any pre-tax plan contributions.

Adjusted Gross Income (AGI) is your Total Income minus some specific deductions that are allowed by the IRS. Some deductions include student loan interest, permitted moving expenses, self-employed retirement program, recipient alimony income, etc.

Itemized Deductions can include items like mortgage interest, local property taxes, charitable contributions, state income taxes, etc.

Standard Deduction is a Itemized Deduction used to estimate federal taxes. If you add up all your itemized Deductions and it is less than the Standard Deduction you take the Standard Deduction to help lower your position on the federal income tax brackets.

Personal Exemption is a tax exemption in which the taxpayer can deduct an amount from their gross income for each dependent they can claim.


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