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2012 Federal Income Tax Brackets and Marginal Tax Rates

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What’s important to realize is that the U.S. tax system is a progressive tax.  That means as your income increases you pay more taxes.

But you don’t pay the tax rate on your entire income.

You only pay the marginal rate on that income that falls in the tax bracket.

“Marginal” refers to what’s happening at the margins, not on the total income.  Once you reach a new marginal rate, that is the rate that applies to all taxable income within that rate level.  The income earned below that level is taxed at the lower marginal rate—the higher marginal tax rate does not get applied all the way back to the first dollar of income earned.

2012 Tax BracketsWhen your income bumps you up to the next bracket you do pay a higher tax.  But you only pay the higher percentage for the income amount that falls in that bracket.

TAKE A LOOK and start guessimating what you will pay in taxes for 2012.

Marginal Tax Rate Single Married Filing Jointly Married Filing Separately Head of Household
10% Bracket $0-$8,700 $0-$17,400 $0-$8,700 $0-$12,400
15% Bracket $8,701-$35,350 $17,401-$70,700 $8,701-$35,350 $12,401-$47,350
25% Bracket $35,351-$86,650 $70,701-$142,700 $35,350-$71,350 $47,350-$122,300
28% Bracket $86,651-$178,650 $142,701-$217,450 $71,351-$108,725 $122,301-$198,050
33% Bracket $178,651-$388,350 $217,451-$388,350 $108,726-$194,175 $198,051-$388,350
35% Bracket $388,351- $388,351- $194,175- $388,351-

U.S. Federal Individual Income Tax Rates History, 1913-2011

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About the Author

Rhonda Evans

Rhonda is the founder and editor of MoneyPoint Live. She is a retired Senior Chief from the USN, mother of two, previous small business owner, and entrepreneur.

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