Tax brackets show you the tax rate you will pay on each portion of your income. There are seven tax brackets. The United States has a progressive tax system based on your Taxable income, not Gross income or Net Income. 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%.
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
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chrismenardtraining.com/post/...
Learn Personal Finance with Microsoft Creators
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• Playlist
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.
Chapters:
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0:00 Intro
1:17 Progressive tax system
2:05 Tax Brackets and IRS webpage
3:09 Formula to add tax
3:35 Taxable income
3:57 Standard deductions
4:30 Manual calculate tax
5:40 XLOOKUP for Tax
10:40 Tax on extra money
12:25 Marginal Tax Rate
13:00 Effective Tax Rate
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...
XLOOKUP videos by Chris Menard
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1) XLOOKUP - Excel's new awesome function by Chris Menard
• XLOOKUP - Excel's new ...
2) XLOOKUP vs. VLOOKUP and Match
• XLOOKUP vs VLOOKUP & M...
XLOOKUP availability
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Other websites:
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Chris Menard's website: chrismenardtraining.com
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11 июл 2024
