Tax Time: What's Your Tax Bracket?

 

The Sixteenth Amendment of the U. S. constitution gives Congress the ability to tax your personal income. As of 2012, six different tax brackets are in place that determine how much tax an individual or a married couple pays on their income. With all the talk in Washington, D.C. about tax reform aimed at raising or reducing taxes, you might want to take a look at your tax bracket to see what proposals apply to you.

Lowest Tax Brackets

Married couples filing jointly who earn less than $17,400 or individuals who earn $8700 yearly are in the 10% tax bracket. You'll pay 10% of your earning to the federal tax system. Couples earning more than $17, 400, but less than $70,700 or single individuals earning more than $8,700, but less than $35,350 yearly will pay 15%.

 Middle Tax Brackets

The middle of the tax bracket scales cover the majority of taxpayers, also known as the "middle class" Americans. These working individuals are not nearing the poverty line but also are not wealthy; therefore, they can be considered "in the middle." As of 2012, married couples filing jointly who earn between $70,700 and $142,700, or individuals who earn between $35,350 and $85,650 annually, are in the 25 percent tax bracket. Jumping to the 28 percent tax bracket are married couples filing jointly who earn between $142,700 and $217,450 and individuals who earn between $85,650 and $178,650 each year.
 Highest Tax Brackets

The two highest tax brackets are 33 and 35 percent. As of 2012, married couples filing jointly who earn between $217,450 and $388,350 and individuals who earn between $178,650 and $388,350 annually are in the 33-percent tax bracket. The highest tax bracket possible is the 35 percent bracket, which includes married couples filing jointly who earn more than $388,350 and individuals who earn more than $388,350.
As of 2012, approximately 26 percent of all taxpayers were included in the 15 percent tax bracket, while fewer than 1 percent were included in the highest tax bracket. In fact, fewer than 3 percent of all United States taxpayers were included in the top three tax brackets ranging from 28 to 35 percent that year.

According to CBS News, the number of people who claimed no income tax liability between 1950 and 1990 averaged at approximately 21 percent, with a low of 18 percent in 1986. In the 1090s, that number grew to about 25 percent and in 2009, 43.4 percent or 65.6 million of Americans paid no federal income taxes.