Finance

What is a Tax Bracket?

The tax brackets 2011 have been split up into six main divisions which start at 10% right up to up to a maximum of 35 percent. It is important to know or speculate which tax bracket you are going to be in for 2011 in order to approximate your complete tax withholding or tax estimates as the year goes by. Prior to being able to figuring out your tax bracket for 2011, the first thing you must decide is what your filing status is. This step is very important to the filing process. Your 2011 filing status will not only affect your tax bracket, but it will also affect the outcomes of your standard deduction and your eligibility for tax credits. This is a brief description of the different filing statuses for 2011 and how they affect your tax bracket 2011. Each status behaves a little differently, so we’re going to determine a close approximation of the tax liability for 2011, assuming you have made $100,000.

The tax brackets 2011 have been split up into six main divisions which start at 10% right up to up to a maximum of 35 percent. It is important to know or speculate which tax bracket you are going to be in for 2011 in order to approximate your complete tax withholding or tax estimates as the year goes by. Prior to being able to figuring out your tax bracket for 2011, the first thing you must decide is what your filing status is. This step is very important to the filing process. Your 2011 filing status will not only affect your tax bracket, but it will also affect the outcomes of your standard deduction and your eligibility for tax credits. This is a brief description of the different filing statuses for 2011 and how they affect your tax bracket 2011. Each status behaves a little differently, so we’re going to determine a close approximation of the tax liability for 2011, assuming you have made $100,000.

The 1st filing status for 2011 is “single.” You are able to file your 2011 tax return as a single man or women if you’re not wedded, were married but legally separated at the end of 2011, or widowed in the year of 2011 and not remarried. Generally speaking, for you to file as a single individual, you’ll want to be single or otherwise not wedded on the last day of the year. Should you choose to file single for the year of 2011, your standard deduction is going to be $5,800. Those who choose to file single ordinarily share the two smallest standard deductions and tax brackets with “married filing separately” men and women. What follows are the tax brackets 2011 for single people:

Taxable Income Tax Rate $0-$8,500 10% $8,500-$34,500 15% $34,500-$83,600 25% $83,600-$174,400 28% $174,400-$379,150 33% $379,150+ 35%

The second filing status for 2011 is “married filing jointly.” Married filing jointly is a special filing status for married couples. Married couples are allowed to benefit from a larger standard deduction as well as more preferential treatment in regard to tax brackets and tax credits. The most apparent aim of the special treatment methods is that the state chooses to encourage marriage and procreation. Being a married filing jointly couple, you will get a standard deduction of $11,600 for 2011. You should make note that this number is exactly twice the single deduction. Also some of the tax rates are generally more favorable. The following charts are the tax brackets 2011 for married filing jointly taxpayers:

Taxable Income Tax Rate $0-$17,000 10% $17,000-$69,000 15% $69,000-$139,350 25% $139,350-$212,300 28% $212,300-$379,150 33% $379,150+ 35%

A different filing status is “married filing separately.” It’s possible you have deduced from the title that this filing status is made for individuals who are presently married, however, they are separated or prefer to keep on being monetarily separated. Some couples are in the steps involved in divorcing at the conclusion of the year. In accordance with the law, these are nevertheless married despite the fact that they are presently in the process of divorce. Generally speaking, if you are married on December 31, 2011, the federal government deals with you as married regardless of whether you’re divorcing or not. There are a lot of couples going through the process of a divorce who prefer to keep their finances separate, for them to file married filing separately. By filing separately, each person will receive a standard deduction of $5,800-the exact same as a single taxpayer. While the standard deduction is the exact same as that of a single taxpayer, the tax bracket is not. People married filing separately have much more unfavorable tax brackets. Let us discuss the tax brackets 2011 for married filing separately taxpayers:

Taxable Income Tax Rate $0-$8,500 10% $8,500-$34,500 15% $34,500-$69,675 25% $69,675-$106,150 28% $106,150-$189,575 33% $189,575+ 35%

Your fourth filing status is “head of household.” If you want to file your 2011 tax return as head of household, you need to be single on December 31, 2011. Maybe you have never been wedded, or you may have been divorced or widowed. You have to also provide a house and at least 50 % of the living expenses for one if not more dependents. More often than not these types of dependents are small children, disabled persons, and the elderly. Head of household people are able to reap the benefits of a bigger standard deduction of $8,700 for 2011. Head of household citizens will also get a unique variety of tax brackets. The following are the tax brackets 2011 for head of household taxpayers:

Taxable Income Tax Rate $0-$12,150 10% $12,150-$46,250 15% $46,250-$119,400 25% $119,400-$193,350 28% $193,350-$379,150 33% $379,150+ 35%

If you are interested in learning more about the 2011 tax brackets or other tax deductions and tax credits check out some of these helpful articles about Tax Brackets 2011.