Tax amount calculation can be a tricky business if you want to learn the exact numbers. There are so many things that affect the tax amount you will pay. With the right management or leading, you can adjust your overall taxes and may even have a chance to make deductions.
The United States’ Tax Rates changes every year depending on the economic, political and environmental conditions. People have already started looking for the right tax rates for 2020. Here in our post, we would like to answer the frequently asked questions about this year’s tax rates.
What Determines the Tax Bracket?
Your taxable income is the total income amount without adding your income adjustments and deductibles. Itemizing and standard deduction are common ways to make deductions.
The more money you earn the higher tax bracket you’re likely to move into. There are different types of brackets for people who have different living conditions.
IRS adjusts the tax brackets according to people’s marital status generally. These marital statuses are listed as:
- Single Filers
- Married, Filing Jointly
- Married, Filing Separately
- Heads of Household
Remember that the amount you’ll pay depends on your taxable income only, shortly it is the exact leftover amount after you’ve subtracted your deductibles.
Here’s the chart showing the four different tax brackets of the year :
|Tax Rate||Single Filers||Married, Filing Jointly||Head of Household||Married, Filing Separately|
|37%||$500,001 and above||$600,000 and above||$500,001 and over||$300,001 and over|
Every taxpayer needs to fill out a W2 form. The IRS provides these forms for both employees and employers. Upon missing the due dates, there is a form called 1040X does the same job as W2, and is also used to report any wrong information presented before, add or subtrack information to your previous forms.