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What Are the Federal Income Tax Brackets for 2022?

There are seven federal income tax brackets: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. How do tax brackets work? Find out below as we're answering your top questions, which include how to get into a lower tax bracket. We're proud to be your tax guide to help make doing your taxes less stressful. Don't hesitate to reach out to our experts at IntentGen with any questions. 

How do Tax Brackets Work?

The U.S. tax brackets work where those who have higher taxable incomes pay higher federal tax rates. There are things to know about when it comes to tax brackets:

  • Being "in" a tax bracket doesn't automatically mean you're paying that federal income tax rate on everything you make. The tax brackets mean that those with higher taxable incomes are subject to higher federal tax rates. While many people want to know how to get into a lower tax bracket, you would have to have lower taxable incomes to have lower federal income tax rates.
  • How do you know how much you'll owe in taxes? The government takes that amount you owe in taxes and divides it by your taxable income into chunks — the tax bracket — and each chunk gets taxed at that corresponding tax rate. 
  • The effective tax rate is a percentage of your taxable income that you'll pay in taxes. To know this rate, divide the total amount owed in taxes (line 16) on form 1040 by your total taxable income (line 15).

For additional information on tax brackets or preparing for your taxes, don't hesitate to reach out to your local tax expert in the Naperville and Chicagoland areas.

What is the Marginal Tax Rate?

This is the tax rate that's paid on your last dollar of taxable income, which is often your highest tax bracket. For example, Single filers with $30,000 of taxable income are in the 12% tax bracket. However, if their income goes up by $1, they would also pay 12% on that extra dollar.

IntentGen is Your Trusted Tax Source!

Whether you have tax-related questions or want to know more about investments and estate, we have you covered at IntentGen — just check out our articles! Stay prepared and updated on the information needed to make the financial decision that's right for you.