How to calculate progressive tax with tax brackets and VLOOKUP in Excel, with examples. Tax brackets show you the tax rate you will pay on each portion of your income.
The United States has a progressive tax system based on your Taxable income, not Gross income or Net Income. There are seven tax brackets and your income is taxed at different rates with a progressive tax system. The more you make, the higher the rate for that bracket.
For example, if you are single in 2021, the lowest tax rate of 10% is applied to your income's first $9,950. The next portion of your income is then taxed at 12%, and then 22%.
Blog post on 2021 tax brackets with VLOOKUP
chrismenardtraining.com/post/...
Example of Progressive Tax System
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If you are single in 2021, and your taxable income is 86,375, you would be taxed at the rates below.
10% for the first 9,950 = $950 in tax
12% for the next $30,575 = $3,669 in tax
22% for the next $45,850 = $10,087 in tax
Those three income numbers total $86,375 and the tax would be $14,751 (950+3,669+10,087).
Notice the more you make the higher the percentage.
Taxable Income
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Taxable income is your Adjusted Gross Income (AGI) minus either the Standard deduction or itemized deductions. Screenshot of IRS form 1040 for 2020 showing AGI and Taxable Income. AGI is line 11 and Taxable Income is line 15
drive.google.com/file/d/1v21p...
Chris Menard's Blog Post on Tax Brackets & XLOOKUP
chrismenardtraining.com/post/...
Learn Personal Finance with Microsoft Creators
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Seven tax brackets for 2021
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For 2021, there are seven different tax brackets with tax rates of 10, 12, 22, 24, 32, 35, and 37 percent. The amount of tax you owe depends on both your taxable income and your filing status.
Standard deductions for 2021:
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Single and married filing separately $12,550
Married filing jointly $25,100
Head of household $18,800
Excel file for tax brackets and XLOOKUP
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chrismenardtraining.com/Files...
IRS Website with Tax Brackets and Standard Deductions for 2021
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www.irs.gov/newsroom/irs-prov...
Other Excel VLOOKUP videos:
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XLOOKUP videos by Chris Menard
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XLOOKUP availability
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#vlookup #excel #taxbrackets
5 июл 2024
