What’s my tax rate? Here are the income brackets for 2022.

If you don’t know your tax bracket, you’re not alone. Many Americans have no idea where they fall on the scale that determines how much federal income tax they pay each year.

The tax code has seven tranches, or income levels, that the IRS adjusts each year to keep pace with inflation. The tax system is progressive, meaning people pay a little more in taxes as they earn more.

Below are the tax brackets for fiscal year 2021, the period during which most Americans must file tax returns by April 18, 2022.

Income tax plots for single taxpayers

Married couples who file separately should follow parentheses for singles, but keep in mind that the 37% higher tax bracket generates more than $ 314,150 in revenue.

Income tax plots for married couples filing jointly

Heads of income tax schemes

Don't forget the deductions

Note that the tables refer to taxable income. Tax laws are designed to protect some of your income with tools such as deductions and credits that can reduce your taxable earnings.

Most people take the standard deduction. These are the deduction levels for the current fiscal season for taxpayers under the age of 65.

Taxpayers 65 and older are entitled to slightly higher standard deductions. The IRS has more information here.

How tax brackets work

Here's a quick look at how the federal income tax works. It’s designed to be slightly progressive, meaning you pay lower rates on your initial income for the year; As you earn more, you pay a higher tax rate, but only to additional income.

Many people do not understand how parentheses work and believe that falling into a certain group means that they pay that amount of tax on all their income. But this is not the case.

For example, a single person who earned $ 100,000 in taxable income last year would fall into the 24% tax group. But instead of paying $ 24,000 to the federal government, the person would pay much less: $ 18,174.50 in income tax. This represents an effective tax rate of just over 18%.

This may seem intimidating, given the intense level of debate that Washington politicians have devoted to tax brackets. But most people don’t have to worry about doing math once they file their taxes. Most tax software will come with this pre-loaded information, so anyone who files taxes electronically or gets help from a tax professional will have the calculations done by them.

Taxpayers who prefer to do their taxes manually can make a single calculation based on where they fall on the table.

In:
• internal revenue service