The 2017 federal income tax brackets and marginal rates are set by the Internal Revenue Service (IRS) and are based on your taxable income and filing status. The tax brackets determine the percentage of your income that you will owe in taxes. The marginal tax rate is the rate at which your last dollar of income is taxed.
The 2017 federal income tax brackets are as follows:
- 10% on income up to $9,325 for individuals, $18,650 for married couples filing jointly
- 15% on income between $9,326 and $37,950 for individuals, $18,651 and $75,900 for married couples filing jointly
- 25% on income between $37,951 and $91,900 for individuals, $75,901 and $153,100 for married couples filing jointly
- 28% on income between $91,901 and $191,650 for individuals, $153,101 and $233,350 for married couples filing jointly
- 33% on income between $191,651 and $416,050 for individuals, $233,351 and $416,050 for married couples filing jointly
- 39.6% on income over $416,050 for individuals, $416,050 for married couples filing jointly
It’s important to note that these brackets apply to your taxable income, which is your total income minus any deductions and exemptions. Taxable income is determined by taking your adjusted gross income and subtracting any standard or itemized deductions as well as any personal exemptions that you are eligible for.
In addition to the marginal tax rate, there are also additional taxes that may apply to certain types of income, such as capital gains and dividends. The tax rate for long-term capital gains (assets held for more than one year) is 0%, 15%, or 20% depending on your marginal tax rate, while the tax rate for short-term capital gains (assets held for one year or less) is your marginal tax rate. Dividends are taxed at the same rate as long-term capital gains.
It’s also important to keep in mind that the 2017 federal income tax brackets and marginal rates may be different from state income tax brackets and rates. Many states have their own income tax system, and some states do not have an income tax at all. It’s important to consult with a tax professional or check with your state’s revenue department to determine your state income tax liability.
To take advantage of the 2017 federal income tax brackets and marginal rates, it’s important to plan your finances and make sure that you are taking all available deductions and credits. This may include contributions to a retirement account, charitable donations, and education expenses. It’s also important to review your withholding and estimated tax payments throughout the year to make sure that you are not underpaying or overpaying your taxes.
In conclusion, the 2017 federal income tax brackets and marginal rates are determined by the IRS and are based on your taxable income and filing status. It’s important to understand how these brackets and rates apply to your income and to plan your finances accordingly. Additionally, it’s important to keep in mind that state income tax may also apply and to consult with a tax professional or check with your state’s revenue department to determine your state income tax liability.
