Federal income tax tables
The federal tax rate tables indicate the rate of tax payable by an individual to the government. It is useful to the assessee to calculate his actual amount of tax that is payable by him. The incidence of tax becomes higher as the income level of an individuals increases. The table displays the exact amount of tax that is burdened on him at a particular level of income.
This schedule changes almost after every year. there are namely four types of assesses i.e.
1) an individual
2) Couple filing returns jointly or a widower or widow who are eligible to pay tax
3) married but filing separately
4) Head of household who file income tax return every year and three different tables are created depending upon the type of assesse. While preparation of table only the taxable income is considered and not the income that is exempt from tax. The total amount that exceeds the exemption limit is considered and total rate of taxes fixed for the amount is indicated.
The following are the rates fixed as per the 2007 Federal tax tables:
In case of an individual:
If the taxable income is above $0 and below $7825 then rate applicable is 10% of the total taxable income. Similarly if the taxable income exceeds $7825 but is below the limit of $31, 850, $782 i.e 10% of above $ 7,825 is applicable and 15% for the balance amount i.e. ( 31,850-7,825). If the taxable limit exceeds $ 77,100 then the tax payable is $4,386.25 in addition to 25% of the taxable income exceeding 31,850. The rate applicable is 28% when the taxable income is up to $15,698. Additionally, $15,698.75 should be paid as tax. When the taxable limit is $349,700 then $39,148.75 plus 33% of the amount exceeding $160,850. The highest slab rate applicable is $101,469.25 plus 35% over the total income exceeding $349,700.
The rates applicable for the spouses filing jointly are the same as fixed to the individuals. But the figures stated as per the table drawn are double as compared to the individuals, because two persons will be filing the return.
When you compare the income tax table of the individuals who are married but are filing returns separately, then rates are similar to the individuals who are single only if the taxable limit is $31,850. The burden of tax thereafter increases compared to the rates as applicable to the individuals. The tax burden of the head of household is least when compared to the other rates. If the taxable income exceeds $174,850 then the total taxable limit is $47,300 plus 35% of the income exceeding 1,74,850. if the range of income is between $64,250 to $97,925 then the taxable amount is $12,486 in addition to 28% of the taxable income exceeding 64,250. if the range of income is up to $174,850 the amount of tax that becomes payable is $21,915 in addition to 33% of the excess amount of 97,925.
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