Tax Season 2016: Brackets and How Much You'll End Up Paying the Federal Government
Although tax season is making its final sprint to the finish line, what's actually going on with those W2s and 1040s remains convoluted to many. Tax Day is literally just days away on April 18, which is when most people will need to file their federal income tax return. To help give a better idea of how much we should be paying and then receiving in taxes, the Internal Revenue Service released its 2016 tax brackets in October 2015.
The brackets break down how much taxes certain levels of income should expect to pay, but don't factor in things like deductions and exemptions. As an individual's income goes up, so does the amount of taxes due.
Basically, a single individual who makes between $9,275 and $37,650 will be paying "$927.50 plus 15% of the excess over $9,275," according to the IRS. For someone who makes over $415,050, the taxes due are "$120,529.75 plus 39.6% of the excess over $415,050."
Read more: Tax Day 2016 Extension: How to Get More Time on Your Taxes When You Just Can't Be Bothered
Year-round, the brackets are useful for daily budgeting, like figuring out your normal spending and how much you should put away for retirement.
Find the official IRS tax bracket document here.