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Tax Bracket is the term used to describe the incremental federal income taxes paid on each additional dollar of earnings. For example, if you are in the 28% tax bracket, then for each additional dollar of earnings you had in 2005, you would owe $0.28 in federal income taxes.
Currently there are seven tax brackets that are determined via a combination of filing status - Single versus Head of Household - and income level. As the income level of a household or individual rises, so does the tax bracket. For example, a person filing under the Single tax status earning $25,000 per year in taxable income is in the 15% tax bracket. If that person were to earn over $75,000, then they would be in the 28% tax bracket.
There are total of 32 different combinations of tax brackets and filing status which are detailed in this publication of Tax Brackets.
Other forms of this term include - tax brackets |
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