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Congress establishes tax brackets, but the IRS can — and often does — adjust them each year to keep up with inflation. That’s why the 2019 tax brackets are slightly different from 2018.
When you file your 2019 federal income tax return, which is due in 2020, knowing your tax bracket and federal income tax rates can help you estimate how much your total 2019 tax obligation will be.
Here are the 2019 tax brackets, and information on how federal tax brackets and tax rates can both affect how much tax you must pay.
- What is a tax bracket?
- What are the 2019 tax brackets?
- How do I use the tax brackets and rates to help calculate my tax?
- How do I calculate my taxes based on my income brackets?
- Why is this important?
Simply put, a tax bracket is a range of taxable income assigned to a particular tax rate. The U.S. has seven tax rates for federal income taxes: 10%, 12%, 22%, 24%, 32%, 35% and 37%.
Because the federal income tax system is progressive, your income can fall into more than one tax bracket and be subject to more than one tax rate. The highest rate that applies to your income is considered your “marginal tax rate.”
Here are the 2019 tax brackets and their corresponding tax rates, based on filing status (from left to right: single, married filing jointly, head of household and married filing separately).
And here are the tax brackets and rates for the 2020 tax year, by filing status.
Knowing which tax brackets and tax rates apply to your income is a starting point for estimating your federal tax obligation. But you’ll need additional information.
To calculate tax, you multiply the tax rates for every bracket your income falls into by the amount of your income that falls within that bracket. And, for brackets/rates more than 10%, there’s an additional amount of tax to add.
Info on the additional tax amounts is typically found in federal income tax tables. For 2019, you can also find it in IRS Revenue Procedure 2018-57. This is the document that details annual inflation adjustments for the 2019 tax year.
To make estimating your taxes easier, here are the tax brackets, tax rates and additional tax for each filing status for 2019.
Now you have starting points, so let’s do the math through a couple of examples.
If your income falls into multiple brackets, you’ll apply the rate for each bracket to the portion of your income that falls within that bracket. Let’s look at a simple example that assumes you’re a single filer and you’ve already done the work necessary to arrive at your taxable income, like applying the standard deduction for your filing status and taking any tax deductions or income adjustments that you qualify for.
A simple example
In 2019, your taxable income is $8,000. This means your income falls within the lowest tax bracket and no others, because the upper threshold for that bracket — $9,700 — is more than your total income. To calculate your tax, multiply your income by the tax rate for that bracket and you’re done. Here’s your equation.
$8,000 x 0.10 = $800
A more complicated example
Now let’s complicate the scenario a bit. You’re still single and you’ve done all your taxable income calculations, but now your taxable income is $40,000. This means your income now falls into three tax brackets, and three tax rates apply to it — 10%, 12% and 22%. But each rate only applies to the portion of your income that falls within the corresponding bracket.
And you’ll need to add in the tax due (from the tables above) for your highest tax bracket.
Here’s a step-by-step breakdown of the calculations.
Step 1: Calculate your tax for the 10% bracket.
$9,700 (the upper threshold for the bracket) x 0.10 = $970
Step 2: Calculate your tax for the 12% bracket.
$29,775 (the difference between the lower and upper ends of the bracket) x 0.12 = $3,573
Step 3: Calculate your tax for the 22% bracket.
Subtract the higher threshold for the previous bracket ($39,475) from your taxable income ($40,000): $40,000 – $39,475 = $525. This is the amount of your income that gets taxed at 22%: $525 x 0.22 = $115.50.
Step 4: Add up the tax from each bracket.
$970 + $3,573 + $115.50 = $4,658.50 total federal income tax obligation
One more way to calculate
If you want to avoid all that math, there’s one more way to simplify your tax calculations: Refer to the chart above.
Locate your marginal tax bracket — for our example case, that’s the 22% tax-rate bracket. Apply that marginal rate to your taxable income over the $39,475 threshold for the previous bracket, which we already calculated is $525. Here’s the equation: $525 x 0.22 = $115.50.
And now for our last step: Simply add that amount to the tax due (from the table above) for your marginal tax bracket to arrive at your total tax obligation: $115.50 + $4,543 = $4,658.50
Having an estimate of how much your total tax obligation will be in a year can be useful for multiple reasons.
First, if you estimate your 2019 federal income tax and discover you’re not having your employer withhold enough tax for 2019, you have some time to adjust your withholdings to avoid a big tax bill come April 2020. If you get to Tax Day 2020 having underpaid your 2019 taxes by more than 10%, the IRS could hit you with an underpayment penalty.
Conversely, if you see you’re withholding much more than you have to, and will have a big refund, you can consider adjusting your withholding to keep more of your money in your pocket throughout the year. Remember, any tax refund you get is your money that you’ve just let Uncle Sam borrow interest-free for a whole year!
While tax brackets, standard deduction amounts and other tax information may change from year to year, the basic calculations you have to do in order to figure your tax bill remain the same. Using tax brackets, tax rates and tax tables to estimate your 2019 federal income tax obligation may help you avoid any surprises when you file your 1040 in 2020.
When you’re ready to file, free online tax preparation and filing services like Credit Karma Tax® can help make the filing process easier. You plug in information from tax documents like your W-2, interest statements and 1099s, and the software will help you with the calculations.
A senior product specialist with Credit Karma Tax®, Janet Murphy is a CPA candidate with more than a decade in the tax industry. She’s worked as a tax analyst, tax product development manager and tax accountant. She has accounting degrees and certifications from Clemson University and the U.S. Career Institute. You can find her on LinkedIn.