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You can further reduce this amount by maximizing tax savings, typically done through taking tax credits and other tax deductions or income adjustments you may qualify for. This means that an individual making $60,000 annually pays a total of $5,096 in income taxes for this year. Note: these rates are coming from our tax rate table as issued by the IRS. We can take the standard deduction of $13,850 from the $60,000 income which results in $46,150 of taxable income.The case study below outlines how $60,000 in income earned by a person filing as single is divided up into tax brackets: To better understand how tax rates or brackets are applied to income, let's look at a scenario. See all tax rates by year | Calculate your personal tax rate A portion of the adjusted gross income is assigned into tax brackets and each bracket is taxed at a different rate tax brackets and rates change by year. Instead, the rates change by the bracket the income falls into. (That’s $6,164 less than if a flat 24% rate was applied to the entire $100,000.What are federal tax brackets and rates and how do they work? In the United States, taxable income is not taxed at only one fixed tax rate. When you add it all up, your total 2022 tax is only $17,836. That leaves only $10,925 of your taxable income (the amount over $89,075) that is taxed at the 24% rate, which comes to an additional $2,622 of tax. After that, the next $47,300 of your income (from $41,776 to $89,075) is taxed at the 22% rate for $10,406 of tax. The next $31,500 of income (the amount from $10,276 to $41,775) is taxed at the 12% rate for an additional $3,780 of tax. Again, assuming you’re single with $100,000 taxable income in 2022, the first $10,275 of your income is taxed at the 10% rate for $1,028 of tax. The rest of it is taxed at the 10%, 12%, and 22% rates. That’s because, using marginal tax rates, only a portion of your income is taxed at the 24% rate. Since $100,000 is in the 24% bracket for singles, will your 2022 tax bill simply a flat 24% of $100,000 – or $24,000? No! Your tax is actually less than that amount. Suppose you’re single and end up with $100,000 of taxable income in 2022. Learn more about how tax brackets work HERE. If you still haven’t filed your 2021 tax return yet, or you just want to compare to see what’s changed, here are the 2021 tax brackets and rates: 2021 Tax Brackets for Single Filers and Married Couples Filing Jointly Tax RateĢ021 Tax Brackets for Married Couples Filing Separately and Head-of-Household Filers Tax Rate 2022 Tax Brackets for Married Couples Filing Separately and Head-of-Household Filers Tax Rate When you’re working on your 2022 federal income tax return next year, here are the tax brackets and rates you’ll need:Ģ022 Tax Brackets for Single Filers and Married Couples Filing Jointly Tax Rate Now, let’s get to the actual tax brackets for 20. (For 2021, the 22% tax bracket for singles went from $40,526 to $86,375, while the same rate applied to head-of-household filers with taxable income from $54,201 to $86,350.) So, that’s something else to keep in mind when you’re filing a return or planning to reduce a future tax bill. However, for head-of-household filers, it goes from $55,901 to $89,050. For example, for single filers, the 22% tax bracket for the 2022 tax year starts at $41,776 and ends at $89,075. The 20 tax bracket ranges also differ depending on your filing status. That means you could wind up in a different tax bracket when you file your 2022 federal income tax return than the bracket you were in before – which also means you could pay a different tax rate on some of your income. However, as they are every year, the 2022 tax brackets were adjusted to account for inflation. The 2022 tax rates themselves are the same as the rates in effect for the 2021 tax year: 10%, 12%, 22%, 24%, 32%, 35% and 37%. Unless you requested an extension to file your 2021 return, the next return that most people will have to file is their federal tax return for the 2022 tax year - which, by the way, will be due on Ap(or October 16, 2023, if extended). It’s never too early to start thinking about your next tax return.