Regardless of whether you’ll receive a tax refund or end up owing, the starting point is the same: you need to file your taxes.
This effort generally includes doing some calculations as well as tossing around terms like “Tax Brackets.” Understanding what a tax bracket is and where you fall is important, so we decided to unpack it for you.
How much money you earn in a year helps determine how much of your earnings should go toward federal taxes. There are seven tax brackets that cover different ranges of taxable income.
The tax bracket you fall into is based on your income and filing status, such as if you’re filing as an individual or filing one return as part of a married couple.
The federal government uses a progressive tax system, which means how much income tax you pay as an individual or a couple depends on how much taxable income you earn; it’s based on a concept the IRS cites as “ability to pay,” which means earners in lower-income brackets should be charged a lower rate of tax high-income earners.
The IRS publishes the range of income for each bracket before it’s time to file. For those looking ahead, the tables below can help you compare the brackets and rates for the 2018 tax year and what you can expect to apply to your 2019 taxable income.
This article is for informational purposes only and is not a substitute for individualized professional advice. Individuals should consult their own tax advisor for matters specific to their own taxes and nothing communicated to you herein should be considered tax advice. This article was prepared by and approved by Marcus by Goldman Sachs, but does not reflect the institutional opinions of Goldman Sachs Bank USA, Goldman Sachs Group, Inc. or any of their affiliates, subsidiaries or division. Goldman Sachs Bank USA does not provide any financial, economic, legal, accounting, tax or other recommendation in this article. Information and opinions expressed in this article are as of the date of this material only and subject to change without notice. Information contained in this article does not constitute the provision of investment advice by Goldman Sachs Bank USA or any its affiliates. Neither Goldman Sachs Bank USA nor any of its affiliates makes any representations or warranties, express or implied, as to the accuracy or completeness of the statements or any information contained in this document and any liability therefore is expressly disclaimed.