Tax Brackets & Filing Status: Where Do You Fit?
Tax season can be confusing, especially when it comes to figuring out your tax bracket and filing status. But don’t worry – we’re here to help you break it down!
What Are Tax Brackets?
Tax brackets determine how much tax you owe based on your income. The U.S. has a progressive tax system, meaning different portions of your income are taxed at different rates.
Think of it like a champagne tower at a wedding:
The top glass (the lowest tax rate) fills first.
Once it overflows, the champagne spills into the next glass (a higher tax rate).
This continues until all glasses are filled.
What this means: Only the portion of your income that "overflows" into a higher bracket gets taxed at that rate – not your entire income. So even if your total income falls within the 22% bracket, only the income that is above the lower threshold is taxed at 22%, while the rest is taxed at lower rates.
Which Filing Status Should You Use?
Your filing status affects your tax bracket, deductions, and eligibility for credits. Here are the main options:
Single – For individuals who are unmarried or legally separated.
Married Filing Jointly – For married couples who file one combined tax return (usually results in lower taxes).
Married Filing Separately – For married couples who file separate returns (sometimes beneficial in certain cases).
Head of Household – For unmarried individuals supporting a dependent, like a child or parent (offers better tax rates than "Single").
Qualifying Surviving Spouse – For those who lost a spouse in the past two years and are supporting a dependent.
How Do You Know Where You Fall?
Your tax bracket depends on two things: your taxable income and your filing status.
Taxable income is what’s left after deductions (such as the standard deduction or itemized deductions), which may lower your taxable income significantly.
Your filing status changes your tax bracket thresholds. For example, the income range for a 12% tax bracket is different for "Single" filers than for "Married Filing Jointly."
To find your exact tax bracket, review the latest IRS tax tables – or let us help you out. We’ll help you file correctly, minimize your tax burden, and maximize your refund.
Got tax questions? We’re here to help. Contact us today to make sure you’re on the right track.