1. Tax Rates The U.S. operates on a “progressive” rather that fixed percentage t
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1. Tax Rates
The U.S. operates on a “progressive” rather that fixed percentage tax scale, meaning as you earn more, your additional earnings are taxed at a higher rate/percentage. The U.S. government passed a new tax code at the end of 2017 that will be in effect for 2018.
Using the new tax rate chart below, calculate how much taxes a single/unmarried individual who earns $65,000 would pay:
Keep in mind:
You only get taxed on your “taxable income” not your total/gross income. The standard deduction went up from $6,350 to $12,000 so you will deduct this from the gross income and then calculated the taxes owed on the remaining income.
Remember, these numbers are for your 2018 taxes. So you should look at them if you’re changing your withholding for next year–starting on January 1, 2018. But you won’t actually file taxes using these numbers until the spring of 2019.
Personal Exemption and Phase-Out
Gone. Previously the 2018 personal exemption rate was slated to me $4,150 but the new tax bill has removed this exemption entirely.
2018 Standard Deduction
The standard deduction is jumping A LOT this year. Here are the standard deductions by tax filing status:
Married Filing Jointly/Surviving Spouse: $24,000
Heads of Households: $18,000
Single: $12,000
Married Filing Separately: $12,000
2018 Tax Brackets
So how much will you pay in taxes for 2018? Here’s how the tax rate is applied for the year. Remember, the income listed here is your taxable income–not your gross income.
Married Filing Jointly and Surviving Spouses
Heads of Households
Unmarried Individuals (other than Surviving Spouses and Heads of Households:
Married Individuals Filing Separately:
Again, remember that these numbers are for the 2018 calendar year. They don’t apply to the 2017 taxes you’ll file this spring. For those numbers, read our 2017 Federal Income Tax Brackets article.
(This information is summarized from the Tax Foundation)
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Taxable Income Taxes Up to $19,050 10% of taxable income Over $19,050 but not over $77,400 $1,905 plus 12% of excess over $19,050 Over $77,400 but not over $165,000 $8,907 plus 22% of the excess over $77,400 Over $165,000 but not over $315,000 $28,179 plus 24% of the excess over $165,000 Over $315,000 but not over $400,000 $64,179 plus 32% of the excess over $315,000 Over $400,000 but not over $600,000 $91,379 plus 35% of the excess over $400,000 Over $600,000 $161,379 plus 37% of the excess over $600,000Explanation / Answer
Taxes a single/unmarried individual have to pay would be as under:
Gross Income : $65000
Less: Standard deduction(for single)- ($12000)
taxable Income $53000
Calculations of Taxes:
working;
1st slab i.e. upto $9525.5 $952.5(10% of 9525.5)
2nd slab i.e. over $9525 upto $38700 $952.5 + $3501(12%of $38700-$9525)=$4453.5
3rd slab i.e. over$38700 upto$82500 $4453.5 + $3146(22% of $38700-$53000)=$7599.5
Upto $9,525 $952.5 Over $9,525 but not over $38,700 $952.5 + $3501= $4453.5 Over $38,700 but not over $82,500 $4453.5 + $3146= $7599.5 or $7600Related Questions
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