In 2017, there are seven tax brackets. Let’s begin with the brackets for single filers.
| Tax Bracket | Income Range |
|---|---|
| 10% | $0 to $9,325 |
| 15% | $9,325 to $37,950 |
| 25% | $37,950 to $91,900 |
| 28% | $91,900 to 191,650 |
| 33% | 191,650 to $416,700 |
| 35% | $416,700 to $418,400 |
| 39.6% | $418,400+ |
Here are the brackets for married couples filing jointly.
| Tax Bracket | Income Range |
|---|---|
| 10% | $0 to $18,650 |
| 15% | $18,650 to $75,900 |
| 25% | $75,900 to $153,100 |
| 28% | $153,100 to $233,350 |
| 35% | $233,350 to $416,700 |
| 35% | $416,700 to $470,700 |
| 39.6% | $470,700+ |
We have a single person with a taxable income of $75,000. As the first table shows, our made up friend’s income of $75,000 puts her in the 25% tax bracket. That doesn’t mean she will be taxed 25% of her entire income. She will be taxed 10% ($932.50) on the first $9,325 of her taxable income. On every dollar of taxable income between $9,325 and $37,950, she will be taxed 15% ($5,226.25. )Finally, she will be taxed 25% on each dollar of taxable income between $37,950 and her taxable income of $75,000 ($9,262.50). To figure out her tax bill, we add the tax dollars from her tax brackets together for a total of $14,489.
Her taxable income of $75,000 puts our friend in the 25% tax bracket; however, the bracket structure of our tax code means she owes Uncle Sam roughly 19% of her taxable income.
(