The federal tax brackets for 2013 differ by almost 30 percent lowest to highest.
There are seven federal tax brackets for 2013, no matter whether you are filing as married, individual, or head of household.
Now that we are in the fall of 2013, tax considerations are on the mind of American taxpayers. Here are the federal tax bracket details for 2013, with some details on how they can affect your personal tax situation.
The lowest tax bracket simply pays 10 percent of taxable income. The highest income level for the lowest federal tax bracket is different depending on filing status, and ranges from $8,025 to $17,850.
After the lowest tax bracket, a set tax fee is assigned to taxpayers, and then a percentage of income is added. For instance, individual taxpayers with a taxable income of between $8,926 and $36,250 pay $892.50 plus 15 percent of anything over the low end of income, in this case $8,926. For the same type of filing on the high end of the spectrum, anyone making $400,001 or more is taxed $116,163.75, plus 39.6 percent of anything above $400,000.
The tax rates are the same at each of the seven federal tax brackets across all filing statuses (10 percent, 15 percent, 25 percent, 28 percent, 33 percent, 35 percent, and 39.6 percent). The initial payment amounts change, as do the figures for the amount which the percentages apply. For instance, at the 15 percent rate, married taxpayers filing jointly pay the percentage based on anything made over $17,850, while married taxpayers filing separately pay the 15 percent on anything over $8,925.
A Spectrem's Millionaire Corner research study on wealthy investors based on income levels finds that most investors believe the federal income tax should range between 8 percent and 25 percent, although the opinion changes based on income levels. Most investors who have a net income of less than $100,000 think the tax rate should be between 8 percent and 15 percent, while most investors with a net income of between $100,000 and $250,000 think the tax rate should fall between 11 percent and 20 percent.
Twenty-three percent of investors with a net income of $750,000 or more think the tax rate should be between 26 and 30 percent.
There are deductions and credits that are taken out before your taxable income level is determined. They include deductions or credits for mortgage, adoption, children, personal exemptions and standard deductions. There are also itemized deductions, but there are limits to how much a taxpayer can deduct based on adjusted gross income.
Also, for 2013 tax purposes, personal and dependent exemptions are either lost in whole or in part for single taxpayers with an AGI of $250,000, married jointly at $300,000, head of household at $275,000 and married filing separately at $150,000.
There are still deductions for school teacher expenses and tuition and fees.
Tax professionals expect changes in the federal tax brackets for 2014 that will take into account inflation rates, and that could produce savings for most taxpayers.
Kent McDill is a staff writer for Millionaire Corner. McDill spent 30 years as a sports writer, working for United Press International and the Daily Herald of Arlington Heights, Ill. From 1988-1999, he covered the Chicago Bulls for the Daily Herald, traveling with them every day through the nine-month season. He also covered the Bulls for UPI from 1985-88, and currently covers the team for www.nba.com. He has written two books on the Bulls, including the new title “100 Things Bulls Fans Should Know And Do Before They Die’, published by Triumph Books. In August 2013, his new book “100 Things Bears Fans Should Know And Do Before They Die” gets published.
In 2008, he resigned from the Herald and became a freelance writer. The Herald hired him to write business features and speeches for the Daily Herald Business Conferences and Awards presentations.
McDill also writes a monthly parenting column for the Herald’s Suburban Parent magazine.
McDill is the father of four children, and an active fan of soccer, Jimmy Buffett and all things Disney.