Every year the IRS tweaks the federal income tax brackets to accommodate changes in inflation and this year 2019 is no different. This is mostly done to prevent inflation from pushing people into higher tax brackets known as the bracket creep. And up to 40 different provisions are taken into account to stop this from happening. Confused? Don’t know how this is set and which federal income tax bracket you fall in? A new post on Efile Tax Advisor clears all the confusion and provides all the information you need to find out which tax bracket you fall in this year 2019.
As long as you earn a taxable income, you will be automatically taxed at the standard rate of 10% irrespective of your filing status. Single taxpayers will need to earn a taxable income of $9,700 to fall within the 12% bracket. They will move into the 22% tax bracket if they hit $39,475 and can end up in the 24% tax bracket once they make as much as $84,200. But for Married taxpayers filing jointly, they will fall within the 12% bracket when their earnings are up to $19,400. They then move to the 22% tax bracket when they reach a $78,950 income and finally will move into the 24% tax bracket when they make a joint taxable income of $168,400.
The tax bracket is calculated different for high-income earners and depending on their income, their tax bracket range will fall within 32% to 37%. Also, long-term capital gains are calculated differently from other forms of income. The rates are 15% on $39,375 for single taxpayers and $78,750 for married taxpayers filing jointly. This could rise up to 20% for single taxpayers gaining $434,550 and $488,850 for married taxpayers filing jointly.
Credits and deductions can force low and middle-income taxpayers into lower tax brackets since these brackets do not consider them. It is best to make use of online tax preparation software to file taxes to ensure you are making the most of every tax credit and deduction.
For more information about the IRS tax brackets and to find out which tax bracket you fall into, please read the original blog post by Efile Tax Advisor here, https://efiletaxadvisor.com/2019/04/17/irs-federal-tax-brackets/