Income Federal Tax Rate

Federal income tax rates are broken down by brackets. Everyone whose earning full within a certain bracket pays the same percentage of that income in tax. Depending on how much more or less money you make from year to year, you may move into a higher or lower bracket. If you get in a higher bracket your federal tax rate goes up, if hit a lower bracket it goes down.

Here is how it works. Based up on how much you make you will determine how much you have to pay into tax based on a percentage. Here is an example of a bracket that is much like that tax bracket. Lets say you have 100 cards. In the first part of the bracket if you make up to 50 cards you must take one of those cards and give it back to the government for taxes. If you make between 51 and 75 cards you must pay back 2 cards to the government. Lastly if you make between 76 and 200 cards you must pay back 3 cards. Because you are in all three tax brackets all would apply. You will pay back 3 cards for the 75- 200 card bracket, 2 cards for the 51-75 card bracket, and 1 card for the 1-50 card bracket. If you notice you have to pay for all the brackets. If you only made it up to 74 cards then you would only have to pay the 1 card for the 1-50 card bracket and 2 cards for the 51-75 card bracket. Hopefully that all makes sense.

Tax brackets make it so that people who make more money pay more taxes but those that make less money have to pay less taxes. When you have more money paying more into taxes is not as big of an issue as it is when you are making less money. The lower tax brackets are taxed less to make sure that lower income families do not have to pay so much into taxes that they cannot afford to pay for their every day necessities.

Tax brackets are available for you to look at them online at the Internal Revenue Services website and also on other sites on the internet. These brackets are public and you are encouraged that look at them and see what the differences in tax brackets may be.

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