Columbus, Ga (WRBL)- Across the United States, everyone is sorted into a specific tax bracket. While everyone belongs to different tax brackets, knowing which one you’re in can be confusing.
There are seven tax brackets, based on your taxable income and filing status:
For example, if you are single, you are taxed 10% on the first $9,700 of your annual income, but if you’re married and file jointly, you and your spouse will stay in the lower tax bracket until your income exceeds $19,400.
“When they are between zero to $9,700 they will be taxed 10% of that income. So once they go over the $9,700 the difference of that amount will then be taxed by 12%,” said Monica Brewer of Brewer Financial Firm.
But, what does that exactly mean? If you are making a total of $30,000 a year, you will fall under the 12% tax bracket and your first $9,700 dollars would be taxed at 10%. Your remaining balance will then be taxed at 12%, according to Brewer.
If you are married and filing jointly, you’ll stay in the 10% tax bracket until you exceed $19,400. So if you and your spouse collectively are making $60,000, your first $19,400 will be taxed at 10%, and your remaining balance will be taxed at 12%, said Brewer.
The big question is, how does this all play apart of you filing your taxes?
“This plays a major part in your taxes because it helps determine the taxes owed. So for example once someone that is single is taxed in the 10% bracket exceeds $9,700 their remaining balance will be taxed in the 12% bracket and that determines their taxes owed,” said Brewer.