What is your Marginal Tax Rate?
Find out how much money you will get after taxes!
If you're looking to find out how much money you're going to end
up paying on taxes, you should definitely find out about your
marginal tax rate. This amount impacts the percentage of your
income that you pay in taxes, and it can also affect most of
your other financial decisions. For instance, people who are in
a higher tax bracket will spend more money investing than
somebody in a lower tax bracket. This may also affect the types
of jobs you take, and whether or not it is actually worth it to
take extra over time.
Marginal tax rates are one reason why some people actually end
up not benefiting by a small raise. If you are just below a
certain income bracket, then a small raise might bump you into
the next tax bracket - and with the higher tax percentages,
you'll end up spending more money on taxes and taking less money
home than you did before.
You can find your marginal tax rate fairly easily if you know
how much money you make each year before taxes. If you do not
know how much you make, then you will not be able to determine
how much money is going to be taken out for taxes.
One thing to keep in mind, however, is that if you do not make
very much money each year (if your income is only a few thousand
dollars a year) then you will not have to pay any taxes at all.
The first tax bracket is at 15%. The amounts for this tax
bracket change every few years, however, so you should
definitely make sure to check a recent website - or ask the IRS
directly, if you're not sure. The current amount is about
$27,000 - so if you make more than that amount, you may end up
paying the higher tax rate of 25%, which is between about
$65,500 and $27,000 currently.
There are three more tax brackets, at 28%, 33% and 35% of your
income. However, the highest tax brackets are for income levels
that are nearly at $300,000 a year. Make sure that you pay
attention to tax rates - it's possible that these levels could
change again depending on the financial situation of the
country.