TheWindyCity-Realist

THE IRS JUST RELEASED THE NEW 2027 🇺🇸 TAX BRACKETS. HERE'S HOW THEY WORK IN PLAIN ENGLISH Every bracket got a little bigger to keep up with inflation, so you can earn a bit more before moving into a higher rate. Step 1: Take what you earn and subtract the standard deduction. That part isn't taxed at all. - Single: $16,600 - Married: $33,200 Step 2: Whatever's left gets taxed in layers. Single filers: - 10% on your first $12,800 - 12% on income up to $52,025 - 22% up to $109,125 - 24% up to $208,325 - 32% up to $264,550 - 35% up to $661,375 - 37% on anything above that Married couples: the cutoffs are roughly double ($25,600, $104,050, $218,250, $416,650, $529,100, $793,650). Example: You're single and earn $76,600. Subtract $16,600 and you're taxed on $60,000. - 10% on the first $12,800 = $1,280 - 12% on the next $39,225 = $4,707 - 22% on the last $7,975 = $1,755 Total: about $7,742 in federal income tax, or roughly 10% of what you earned. Even though you're "in" the 22% bracket, only your last $7,975 gets taxed at 22%.