As we round the corner and head toward the end of 2011, many of us are beginning to think about our year-end taxes – whether we will end up owing money come tax season and, if so, how much?
Although the 2011 federal income tax brackets haven’t changed very much, now is a good time to take a look at them to get an idea of where we might fall. And since having an idea of how much we might owe come next April will give us plenty of time to prepare, let’s take a look at it now:
For Single Filers:
- 10% tax bracket when you earn between $0 and $8,500
- 15% tax bracket when you earn between $8,501 and $34,500
- 25% tax bracket when you earn between $34,501 and $83,600
- 28% tax bracket when you earn between $83,601 and $174,400
- 33% tax bracket when you earn between $174,401 and $379,150
- 35% tax bracket when you earn over $379,150
For Married Joint Filers
- 10% tax bracket when you earn between $0 and $17,000
- 15% bracket when you earn between $17,001 and $69,000
- 25% tax bracket when you earn between $69,001 and $139,350
- 28% tax bracket when you earn between $139,351 and $212,300
- 33% tax bracket when you earn between $212,301 and $379,150
- 35% tax bracket when you earn over $379,150
For Those Filing as Head of Household
- 10% tax bracket when you earn between $0 and $12,150
- 15% tax bracket when you earn between $12,151 and $46,250
- 25% tax bracket when you earn between $46,250 and $119,400
- 28% tax bracket when you earn between $119,401 and $193,350
- 33% tax bracket when you earn between $193,351 and $379,150
- 35% tax bracket when you earn more than $379,150
For Married but Filing Separately
- 10% tax bracket when you earn between $0 and $8,00
- 15% tax bracket when you earn between $$8,501 and $34,500
- 25% tax bracket when you earn between $34,501 and $69,675
- 28% tax bracket when you earn between $69,676 and $106,150
- 33% tax bracket when you earn between $106,151 and $189,575
- 35% tax bracket when you earn over $189,575
Calculating What You Will Owe
If you know how you will be filing your tax return for the 2011 tax year and can approximate what your income will be, you can make a good guess as to how much you will owe in taxes this year. The one thing that many people do not realize is that when they move up a tax bracket, they only pay the higher tax amount on the income earned above the previous tax level.
For example, if you are a single filer and earned $45,000 during 2011, your tax bill will be $4,750 (the amount taxed at the 15% rate on your earnings up to $34,500) plus $2,625 (the amount earned in excess of the 15% rate and taxed at 25%). This is good news for anyone who wrongly assumes that they will be taxed at the 25% tax rate for their entire income. Keep in mind that this amount would be the highest that you would pay, because with tax credits and tax deductions, your bill could wind up being significantly lower. (still confused on how tax brackets work? Find more information here on how tax brackets work)
For that reason, it is always a good idea to consult with a professional tax expert to be sure that you are maximizing your tax benefits to minimize your tax liability.
