What Is the Lowest Federal Income Tax Bracket?
In the United States, income tax is calculated in brackets, or levels of taxation, based on your overall taxable income. Taxable income is gross income minus any allowed deductions. The standard deduction for 2009 is $5,700 dollars. If you earned $15,700 in 2009, your taxable income, after subtracting the standard deduction, would be $10,000. In 2009, the lowest federal tax rate is 10 percent. The tax bracket that this rate applies to is based on your filing status.
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Single Taxpayer
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If you are a single taxpayer, the lowest federal tax bracket, 10 percent, applies to you if your taxable income is between $0 and $8,350. The standard deduction for single taxpayers is $5,700, so your gross income must be between $5,700 and $14,050 to be in this tax bracket. If you have other deductions, your income may be higher and still qualify for this bracket.
Married, Filing Separately
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If you are married but you and your spouse file separate tax returns, the IRS considers both of you single tax payers and you are covered under the single taxpayer rules.
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Married, Filing Jointly
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If you are married and filing jointly, the lowest federal tax bracket, 10 percent, applies to you if your taxable income is between $0 and $16,700. The standard deduction for married taxpayers filing jointly is $11,400, so your gross income must be between $11,400 and $28,100 to be in this tax bracket. If you have other deductions, your income may be higher and still qualify for this bracket.
Head of Household
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If you are filing as the head of household, the lowest federal tax bracket, 10 percent, applies to you if your taxable income is between $0 and $11,950. The standard deduction for taxpayers filing as head of household is $8,350, so your gross income must be between $8,350 and $21,300 to be in this tax bracket. If you have other deductions, your income may be higher and still qualify for this bracket.
Conclusion
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There are other deductions that are available that can reduce your taxable income and therefore lower your tax liability. Be sure to explore any available deductions that might reduce your tax liability and therefore reduce your tax bracket.
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References
- Photo Credit Image by Flickr.com, courtesy of Rick Audet
