The next tax bracket is 12% of taxable income levels between $11,601 to $47,150. The tax rates continue to increase as someone’s income moves into higher brackets. The IRS uses different federal income tax brackets and ranges depending on filing status: Read more in Viewpoints about how tax brackets work.
How do tax brackets work?
The IRS uses 7 brackets to calculate your tax bill based on your income and filing status. As your income rises it can push you into a higher tax bracket and may increase how much you owe. You don’t pay the same tax rate on every dollar of income. Your income is broken down by thresholds.
How do different tax brackets affect tax planning?
Understanding how your income falls into different tax brackets can help with tax planning. The IRS uses 7 brackets to calculate your tax bill based on your income and filing status. As your income rises it can push you into a higher tax bracket and may increase how much you owe. You don’t pay the same tax rate on every dollar of income.
