Tax Season Week 2 - What percentage am I going to have to pay in taxes?

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Permalink Reply by Shelley on January 21, 2009 at 8:18pm

Hi Kathy! I wanted to thank you so much for the help you give all of us..... At tax time my nerves are totaly out of wack!!!!!! but with the information you have given us OMG has been such a help!! Again thanks alot. take care! Shelley

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Permalink Reply by Don Crisman on February 3, 2009 at 12:53pm

Kathy,

Thanks so much for the info. It was a HUGE help and saved me a lot of time.

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Permalink Reply by Kathy Morgan on February 3, 2009 at 12:56pm

If we don't help each other out no one else will. No problem!

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Permalink Reply by jan on February 23, 2009 at 3:51pm

From your chart it looks like a single person can make more money at a lower rate than a maried couple. Is that correct?

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Permalink Reply by Kathy Morgan on February 23, 2009 at 5:09pm

That's partly true. Until you hit approx 125K in taxable income the taxes for MFJ are basically the same as if you had 2 single people making half of the total. Once you get over that mark the MFJ tax rate goes above what it would be for 2 single people making 62.5K each. But it is much closer then it was before the tax cuts in 2004. The table are changing a little bit every year making things more equal.
But you have to remember that the MFJ couple gets at least one more exemption and double the standard deduction then the single person, so their taxable income gets lowered.
For example: A married couple with no dependants, the standard deduction and $150K in gross income would have taxable income of $132100 (150K - 10900 standard deduction and 7000 for two personal exemptions). A single person with the same $150K gross income, standard deduction and no dependants would have $141050 in taxable income (150K - 5450 standard deduction - 3500 personal exemption).

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