tax bracket(redirected from Tax brackets)
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Related to Tax brackets: head of household, Tax deductions
Marginal Tax Rate
A tax bracket is a range of income that is taxed at a specific rate.
In the United States there are six brackets, taxed at 10%, 15%, 25%, 28%, 33%, and 35% of the amount that falls into each bracket.
For example, if your taxable income was high enough to cross three brackets, you'd pay tax at the 10% rate on income in the lowest bracket, at the 15% rate on income in the next bracket, and at the 25% rate on the rest.
The rates remain fixed until they are changed by Congress, but the dollar amounts in each bracket change slightly each year to adjust for inflation.
In addition, the income that falls into each bracket varies by filing status, so that if you file as a single taxpayer you may owe more tax on the same taxable income as a married couple filing a joint return.
The highest marginal tax rate to which a person or estate will be subject.Income taxes and estate taxes are calculated as a percentage of adjusted gross income, but the percentage increases as income increases. One's income is divided into brackets with an upper and lower limit to each bracket;the income within the bracket is taxed at its appropriate percentage rate,and then the next bracket is taxed at a higher percentage rate. See marginal tax rate.