What is the tax group?

The tax band is a cut off point or division used in tax systems that proceed or retreat depending on income. In the US, for example, tax groups are divided into USD of USD (USD) in the first few parts. Note that these parentheses do not contain other types of taxes, such as social security payments or disability insurance. Instead, the amounts of the dollar of your income are taxed in the holder and often pay different percentages depending on the income.

A simple understanding of the US tax group is to imagine that someone who earns $ 1-10,000 is taxed by 10% of their income (it is a slight simplification). Revenue over the first $ 10,000 would be taxed by a higher percentage. It is also important to understand that there are permissible deductions for each person. One person who earns $ 10,000 would not pay $ 1,000 taxes. Instead, it would have a standard deduction of $ 5,350 and a personal exception of $ 3,400 (with anamontate for change). Did not payby taxes from any amount, but the money earned over his deductions.

With our example on our only person, this would mean that the person would not pay any taxes if he earned less than $ 8750. The 10% rate would apply to amounts between $ 8751 and $ 18,750. The amounts concerned would be taxed by a higher percentage, but the first tax group would be taxed only to 10%and no money according to the sum of the standard deductions and personal exemption could not be considered as taxable income.

Basically, the tax group determines the percentage of graduation under which you will be taxed, and these percentages may differ from Earth to Earth. Any change in the Tax Act may increase or reduce the percentage or change the amount of exceptions or deductions. The tax group also refers to where your income decreases. If you earn more money, maybe you are a higher holder and if you do less, you can be in the bottom console.

Not only earned the amount, but the dependent persons you have, and whether you are married can change the state of taxes. Our individual example, if he had a husband who did not create any income, could earn up to $ 17,500 in a non -taxable income. He and his husband should be entitled to a personal deduction and an exception. They would not pay taxes on this first amount and 10% of the tax would then apply to another $ 10,000 they created for it.

Taxable income is different from income, so it is important to ensure that you search for all your deductions and exemptions before searching for taxes when submitting taxes. What tax group are you largely depending on your overall gross wage, but on your taxable earnings after deduction. Any progressive system is further complicated because you cannot simply think of taxes by percentage, equal tax, because the non -paying percentage of all the money you earn. Since the percentage of the tax is growing, you pay different percentage on each holder you reach and thenyou exceed.