The IRS have released the Projected 2016 Tax Rates
The IRS have finally released the 2016 Tax Rates. The Federal income tax currently consists of 7 rate brackets: 10%, 15%, 25%, 28%, 33%, 35%, and 39.6%. The amount of tax you owe in April depends on your filing status and income level.
Remember, only the money you earn within a specific tax bracket is subject to that specific tax rate. If you earn more income and move into a higher tax bracket, not all of your income will be taxed at the higher rate.
Here are the projected Federal tax rates that will apply to your 2016 income (listed by filing status):
Single
| Taxable Income | Tax Rate |
| $0—$9,275 | 10% |
| $9,276—$37,650 | $927.50 plus 15% of the amount over $9,275 |
| $37,651—$91,150 | $5,183.75 plus 25% of the amount over $37,650 |
| $91,151—$190,150 | $18,558.75 plus 28% of the amount over $91,150 |
| $190,151—$ 413,350 | $46,278.75 plus 33% of the amount over $190,150 |
| $413,351—$415,050 | $119,934.75 plus 35% of the amount over $413,350 |
| $415,051 or more | $120,529.75 plus 39.6% of the amount over $415,050 |
Married Filing Jointly or Qualifying Widow(er)
| Taxable Income | Tax Rate |
| $0—$18,550 | 10% |
| $18,551—$75,300 | $1,855 plus 15% of the amount over $18,550 |
| $75,301—$151,900 | $10,367.50 plus 25% of the amount over $75,300 |
| $151,901—$231,450 | $29,517.50 plus 28% of the amount over $151,900 |
| $231,451—$413,350 | $51,791.50 plus 33% of the amount over $231,450 |
| $413,351—$466,950 | $111,818.50 plus 35% of the amount over $413,350 |
| $466,951 or more | $130,578.50 plus 39.6% of the amount over $466,950 |
Married Filing Separately
| Taxable Income | Tax Rate |
| $0—$9,275 | 10% |
| $9,276—$37,650 | $927.50 plus 15% of the amount over $9,275 |
| $37,651—$75,950 | $5,183.75 plus 25% of the amount over $37,650 |
| $75,951—$115,725 | $14,758.75 plus 28% of the amount over $75,950 |
| $115,726—$206,675 | $25,895.75 plus 33% of the amount over $115,725 |
| $206,676—$233,475 | $55,909.25 plus 35% of the amount over $206,675 |
| $233,476 or more | $65,289.25 plus 39.6% of the amount over $233,475 |
Head of Household
| Taxable Income | Tax Rate |
| $0—$13,250 | 10% |
| $13,251—$50,400 | $1,325 plus 15% of the amount over $13,250 |
| $50,401—$130,150 | $6,897.50 plus 25% of the amount over $50,400 |
| $130,151—$210,800 | $26,835 plus 28% of the amount over $130,150 |
| $210,801—$413,350 | $49,417 plus 33% of the amount over $210,800 |
| $413,351—$441,000 | $116,258.50 plus 35% of the amount over $413,350 |
| $441,001 or more | $125,936 plus 39.6% of the amount over $441,000 |
From Forbes.com:
2016 Tax Rates, Brackets & Exemption Amounts May Result In Lower Bills
The U.S. Bureau of Labor Statistics reported today that the consumer price index (CPI) has dropped off by just .1% for the month of August. The index for all items less food and energy increased 0.1% in August, the same as the previous month. So what’s the reason for the dip? A sharp decline in the price of gasoline: before seasonal adjustment, gasoline prices declined 5.4% in August. Overall, however, over the last 12 months, the all items index rose 0.2% before seasonal adjustment.
The CPI measures the cost of goods and services. When the CPI doesn’t change much, it tends to signal that interest rates will stay put. This is important for taxpayers because the Tax Code provides for mandatory annual adjustments to certain tax items based on inflation. Of those tax items subject to mandatory annual adjustments, federal income tax brackets tend to get the most attention since have been subject to adjustment for nearly 30 years. However, inflation adjustments are now routinely included in new tax legislation which can be confusing for taxpayers. Luckily, there are tax professionals out there who can sort it all out for you.
2016 Tax Rates
2016 Tax Brackets
2016 Tax Exemptions
