What Are the Different Tax Level Brackets?
Tax brackets are determined by a person's level of income. Whether someone is single or married and how she files her taxes also affects what tax bracket she's in. Tax requirements change from year to year.
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History
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In 1913, the 16th Amendment to the constitution was ratified, making federal income tax a permanent means of collecting revenue from people who lived and worked in the United States. This first system of taxes featured brackets that were based upon income levels. The percentages that corresponded to these brackets were adjusted in 1986 and have been standard ever since.
Levels
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There are six levels of income taxation as of 2011: 10 percent, 15 percent, 25 percent, 28 percent, 33 percent and 35 percent. The more a person makes, the higher his specific tax bracket.
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Taxable Income
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The figure used to calculate tax brackets is a person or couple's taxable income. Taxable income is typically any monies earned for working or for benefits that are received, though the IRS identifies a few areas of exception each year.
Filing Status
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The tax bracket ranges are divided by income and tax filing status. Those who are single or who are married and filing separately use one table. Separate tables exist both for those who are married and filing jointly and heads of a household in which the spouse is not employed.
Warning
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Penalties can be steep for filing under the wrong tax bracket. Any questions concerning what bracket a person or couple will be taxed at should be posed to the IRS or to an experienced tax accountant.
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Resources
- Photo Credit tax forms image by Chad McDermott from Fotolia.com
