How to Determine Your Tax Bracket

Check your tax bracket before making tax decisions.

A tax bracket is a line of a tax schedule that shows the percentage rates at which different amounts of your income are taxed. For example, in 2007, if you are single, the first $7,825 you earn is taxed at a rate of 10 percent. If you earned $7,825 or less in 2007, you would be in the 10 percent tax bracket. If you earned $7,826, however, you would move into the next tax bracket. The first $7,825 you earned would still be taxed at 10 percent, but that extra dollar you earned would be taxed at 15 percent. Your tax bracket is also referred to as your marginal tax rate.

Instructions

1. Determine your filing status. There are different tax brackets for those filing single, married filing jointly, married filing separately and head of household. Make sure you are looking at the correct tax schedule when determining your tax bracket.

2. Find out your annual income by asking your company's human resources department or by looking at your most recent paycheck stub. If you get paid every two weeks, take your gross pay and multiply it by 26.

3. Look up the federal tax rate schedules on the IRS website or at a nearby IRS office. Tax rates do not change every year, so the most recent schedule available may not be for the current year.

4. Locate the line with the range where your annual gross income falls. For example, if your annual gross income is $30,000, you would look at the line that says "if taxable income is over $7,285 but not over $31,850, the tax is $782.50 plus 15 percent of the amount over $7,825." Your tax bracket, or marginal tax rate, is 15 percent.

References

• Money Chimp: Federal Tax Brackets

Resources

• Internal Revenue Service