Federal Taxation Explained

Graduated Income Tax Rates

Federal income taxes are levied with what are known as graduated income tax rates. As your income increases, specific increments of your income are taxed at higher and higher rates.

For a married couple filing jointly in 2019, the first $19,400 of your income is taxed at a 10% rate. The next incremental $59,550 of your income is taxed at a 12% rate. The next incremental $89,450 of your income is taxed at a 22% rate. And so on, up to a maximum tax rate of 37%.

For a single filer in 2019, the first $9,700 of your income is taxed at a 10% rate. The next incremental $29,775 of your income is taxed at a 12% rate. The next incremental $44,725 of your income is taxed at a 22% rate. And so on, up to a maximum tax rate of 37%.

There are 7 Federal income Tax Brackets & Tax Rates.

Adjusted Gross Income (AGI)

The sum of all of your Federal income, less any reductions to your Federal income, is referred to as your Adjusted Gross Income (AGI). This is the amount that is reported on your 2019 or 2018 Form 1040 tax return, line 7 (on your 2017 Form 1040 tax return, on p.1, line 37, at the bottom of the page and again on p.2, line 38, at the top of the page).

Standard Deduction

Under the Tax Cuts and Jobs Act of 2017 (TCJA), the Standard Deduction for married couples filing jointly is $24,800 (2020, $24,400 in 2019). The Standard Deduction for single filers is $12,400 (2020, $12,200 in 2019). Taxpayers who are age 65 or older can claim an additional Standard Deduction of $1,300.

Alimony

Interest, Dividends, & Capital Gains

Self-Employeed Individuals

Tax Brackets & Tax Rates

Estimated Tax Payments

Extensions

Why Do I Owe More?

Where's My Refund?

Estate Taxes

Trusts

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