tax bracket

(redirected from Tax brackets)
Also found in: Dictionary, Thesaurus, Medical, Legal, Encyclopedia.
Related to Tax brackets: head of household, Tax deductions

Tax bracket

The percentage of tax obligation for a particular taxable income.

Marginal Tax Rate

A percentage of one's income that one must pay in taxes. Marginal tax rates vary according to income levels. One who makes $100,000 per year has a higher marginal tax rate than one who makes $25,000. However, the marginal tax rate does not increase for one's entire income, merely each dollar over a certain threshold. Suppose one pays 10% of one's income up to $25,000, and 20% thereafter. The taxpayer making $25,001 does not suddenly have to pay 20% of his/her entire income, only on the one dollar over $25,000. That is, he/she owes 10% of $25,000 ($2,500) and 20% of the $1 over that (or $0.20). All things being equal, this taxpayer owes $2,500.20 in taxes.

tax bracket

Tax bracket.

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.

tax bracket

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.

Tax Bracket

The rate at which income at a particular level is taxed.
References in periodicals archive ?
Because estates and trusts operate as conduits, substantial tax savings may result from distributing the income, including net investment income, to a beneficiary who is in a lower tax bracket.
When with drawing monies during retirement, to the extent that the client can access funds that are tax-free or tax-advantaged, he or she may be able to prevent moving into a higher marginal tax bracket and thus minimize overall taxes.
If you'll be in a higher tax bracket next year, you may wish to accelerate your income into this year and postpone your deductions into the following year.
8 billion as inflation pushes more workers into higher tax brackets.
Assume a mortgage of $150,000 and a homebuyer in the combined Federal and state tax bracket of 33%.
For a corporation in the 40 percent tax bracket (state and federal), that means about $400,000 in direct tax savings from the passive losses.
The Tax Foundation recently examined the IRS's updated tax brackets for 2017.
Binay, Santiago, Duterte, Poe and Roxas also said they would support an immediate adjustment of the personal income tax brackets to take inflation into account.
Review the federal tax brackets and determine what marginal tax bracket you are in.
He lamented that the failure to adjust tax brackets to inflation resulting to the so-called "bracket creep" phenomenon and the failure of a large number of the self-employed to pay the right amount of taxes resulting to "low tax participation" made the income tax system grossly unfair and inequitable.
A notable difference when comparing individual taxes to trust taxes continues to be the compressed tax brackets of trusts.