What Are My 2012 Tax Rates?

| December 15, 2012

calculating taxes

Toward the end of each year, the IRS releases the official inflation-adjusted tax brackets for the next year. The tax brackets in simplest of terms are the cutoff values for taxable income. If your income goes beyond a certain amount, the percentage of your income that goes toward your federal taxes will go up.

So what does that mean for 2012? While the 2012 levels were adjusted for inflation, the rates stayed similar to 2010 and 2011, thanks to the extension of the Bush-era tax cuts in 2010. Let’s take a closer look at what that means and, if you want more information, scan through DexKnows for a tax professional near you.

How Does a Tax Bracket Work?

Let’s say you made $9,000, and the first tax bracket is 10 percent for income from $1 to $10,000. That means you would owe 10 percent of $9,000, or $900.

Simple enough? Not so fast. Let’s say your taxable income is instead $14,000. The next tax bracket is 15 percent for income from $10,001 through $20,000.

It’s not as easy as taking the $14,000 and figuring out 15 percent. You would want to figure out 10 percent of income up through $10,000 and then 15 percent of the income over that. So it would be $1,000 plus $600 for the income over $10,000, or $1,600 total.

If you went past the next bracket and the next percentage was 20 percent, you would hypothetically owe 10 percent on the first $10,000, 15 percent on the next $10,000 and then 20 percent on the income past that. It would go up through the six tax brackets.

There are ways to lower your taxable income, including taking advantage of income tax deductions, such as the standard $5,950 deduction for filing as a single person and $11,900 for a married couple filing jointly. Contributions to retirement accounts is another way to lower your taxable income. Remember to search for any deductions and exemptions that may lower that taxable income.

What Are the 2012 Tax Brackets?

The 2012 tax brackets, adjusted for inflation by the IRS are:

If filing single

10 percent, $0-$8,700

15 percent, $8,701-$35,350

25 percent, $35,351-$85,650

28 percent, $85,651-$178,650

33 percent, $178,651-$388,350

35 percent, over $388,350

If married, filing jointly

10 percent, $0-$17,400

15 percent, $17,401-$70,700

25 percent, $70,701-$142,700

28 percent, $142,701-$217,450

33 percent, $217,451-$388,350

35 percent, over $388,350

If married, filing separately

10 percent, $0-$8,700

15 percent, $8,701-$35,350

25 percent, $35,351 -$71,350

28 percent, $71,351-$108,725

33 percent, $108,726-$194,175

35 percent, $194,176 or more

If filing head of household

10 percent, $0-$12,400

15 percent, $12,401-$47,350

25 percent, $47,351-$122,300

28 percent, $122,301-$198,050

33 percent, $198,051-$388,350

35 percent, $388,351 or more

These rates affect the 2012 tax year, meaning they will affect the income tax return you file by the April 15, 2013, tax filing deadline.

That’s just part of the equation when figuring out how much you may owe or how much of a refund you may get. If you need help while figuring out your 2012 taxes, remember, DexKnows can help you find tax professionals in your community.

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Category: Taxes

About the Author ()

Central Ohio journalist with 15 years experience at daily newspapers. Freelance writer and amateur photographer. Storytellers are my heroes, poets my idols and photographers my looking glass.