The United States has a progressive tax system. This means that the higher the income gets, the more you pay taxes. Tax Brackets are the method of categorizing the taxpayers.
There are seven different tax brackets used in the U.S. The taxable amount is the leftover after you have made your deductions.
Considering the last year, the tax system hasn’t changed this year, which means we still have the seven brackets but the rates have changed.
New brackets seem to be a way better than the previous ones. The middle-class income tax rates have been decreased and the income scale is bigger now.
For example, an income of $300,000 has a 33% tax rate according to the 5. bracket of the old list. The same amount has a 24% tax rate according to today’s bracket list.
Actually, when we take a look at the overall scene, there has not been a big change in the tax rates, the thing that has been changed is the tax rate that’s taken from a particular crowd.
I think the government thought the middle class needed a hand. Maybe because of political reasons, maybe because the financial future of the middle class was in danger, that we don’t know, but the rates are good now.
If you’re not so good at math like me, you can check this table comparing the old and the new tax brackets:
As you can see there seven tax brackets and they have rates ranging from 10% to 37%. The overall tax amount depends on the individual’s marital status. Single or married individuals and heads of households have different filing methods. You can find detailed information about this in our other posts.