The first thing you have to find out is what tax bracket you’re in. This is based on your filing status and your taxable income.
The next thing you will do is claim your exemptions and deductions. Each bracket is taxed at a separate rate and the total tax is the sum of the taxes on each bracket.
Inflation is Considered and Amounts are Adjusted
The tax rates are adjusted each year to keep pace with inflation. You don’t want to find yourself in a higher tax bracket just because you received a cost of living raise. Things may get very interesting here in the next year for the higher income levels of the American public.
The highest tax rate which is 35% may go up to 39% or higher. We will have to keep an eye open for changes in the next coming year.
- Married Filing Jointly
- Head of Household
- Married Filing Separately
Each filing status has its benefits and you will have to do your research to see which status will be just right for you. I would suggest using an online federal income tax return software program like TurboTax Online. As you answer the questions you will see helpful tips and advice that will be geared toward the best possible outcome for your unique situation.
Capital Gains Tax Rates
Gains from the sale of assets owned for less than or equal to one year are taxed as ordinary income. Gains from sales of assets that have been owned for more than twelve months are taxed at special lower rates.
Married Filing Jointly
If you’re filing as married filing jointly the federal income tax schedule starts at $0 to $372,951 and over. The lowest tax rate is 10% and the highest is 35%. Of course each filing status has different cut off amounts that advance you to a higher tax rate. The best way to determine your own tax rate is to calculate or estimate your tax return through tax return software online.
Changes in Federal Income Tax Schedule
Every year the federal income tax schedule will change to keep up with the times. In our economy today changes are hitting us like the speed of light. I don’t know about you but, I don’t have the time to keep up with the recent tax changes.
If you would like the assurance and peace of mind knowing your federal income tax return is in compliance with current tax laws then I suggest you trust the Tax Experts at TurboTax Online. Top companies that we know and trust have given them the #1Rating. Visit Turbo Tax today to guarantee an accurate, error free tax return!