1. Marginal tax brackets The amount of federal income taxes that you are required to pay is based on your filing status, your taxable income, and the IRS tax rate tables. The Income tax tables are progressive meaning the tax rates increase as taxable income increases. Each filing status has seven income ranges, or brackets, and the rates are 10%, 15%, 25%, 28%, 33%, 35%, and 39.6%. As your taxable income increases, you pay at a higher rate, but only on the income that falls within a range. The 2016 tax brackets show how the tax in the IRS tax tables is calculated, Tax Bracket 10% 15% 25% 2016 Tax Brackets Single Married Filing Jointly $0-$9,275 $0-$18,550 $9,276-$37,650 $18,551-$75,300 $37,651-$91,150 $75,301-$151,900 $91,151-$190,150 $151,901-$231,450 $190,151-$413,350 $231,451-$413,350 $413,351-$415,050 $413,351-$466,950 $415,051+ $466,951+ 28% 33% 35% 39.6% Use the tax bracket information to fill in the missing amounts in the following tax table. Single Filers Taxable Income Tax $0-$9,275 10% $9,276-$37,650 $37,651-$91,150 $91,151-$190,150 $190,151-$413,350 $413,351-$415,050 $415,051+ of taxable income plus 15% plus 25% plus 28% plus 33% plus 35% plus 39.6% of excess over $9,275 of excess over $37,650 of excess over $91,150 of excess over $190,150 of excess over $413,350 of excess over $415,050 A first step to tax planning is to know your tax bracket and how close you are to the nearest tax brackets. What does it mean to be in the 25% tax bracket? Check all that apply. You pay 25% in taxes on your total taxable income. You pay 25% on your last dollar of taxable income earned. If you are single, your income falls in the $37,651 to $91,150 range. You save 25% in taxes on your last dollar of allowable deductions