Tax Bracket Breakdown

Confused about your tax bracket? Don't worry—we break it all down so you know exactly how they work and how they impact your wallet. These brackets apply to income made in 2024 and will change for income made in 2025 BUT the system stays the same. Listen now to make tax season a little less painful!

And remember...the #IRSSUCKS

John Briggs | Tax Genius
info@incitetax.com
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Chapters

• 0:00 Introduction
• 0:11 What is a Tax Bracket?
• 0:48 2024 Tax Brackets Breakdown
• 1:25 Example Tax Calculation
• 2:11 Ways to Lower Taxable Income
• 2:36 Outro

Transcript

00:00:00 everyone falls into a tax bracket so what exactly does that mean and how does it apply to you let's break it down so you understand exactly how tax brackets work and more importantly how they affect your wallet first things first what even is a tax bracket in the US we have a progressive tax system which means the more you make the higher the percentage of your income gets taxed but and this is important you're not taxed One Flat Rate instead your income is divided into chunks and each chunk is

00:00:26 taxed at a different rate for example let's say you make $50,000 a year you don't just get taxed in one single rate for all of it instead part of your income is taxed at 10% another part at 12% and so on so when you hear someone say I'm in the 22% tax bracket that doesn't mean all their income is being taxed at 22% just the portion that falls into that bracket let's go over the current tax brackets for 2024 keep in mind these apply to taxable income so after deductions and adjustments this is what the brackets will look like for

00:00:58 single filers we start out with a 10 % tax on income up to $1,600 then the number grows to 37% tax on income over $6 9,350 and this is what the brackets look like for married couples filing jointly we start with a 10% tax on income up to $23,200 and in this situation the 37% tax would be on income over $731,000 let's go through a quick example say you're a single filer making $70,000 a year here's how your taxes break down the first $11,600 is taxed at 10% which equals $1,160 the amount from 11,601 to

00:01:41 47,1 15 is taxed at 12% so $ 4,266 the amount from 47,1 151 to 70,000 is taxed at 22% which equals $5 5,22 so in total you'd owe about $1,448 in federal income tax not 22% of 70,000 which would be way higher understanding this can save you a lot of stress and confusion during tax season and maybe even save you some money now that you get how tax brackets work let's talk about ways you can lower your taxable income max out deductions things like retirement contributions 401K Ira student loan interest and

00:02:21 business expenses use tax credits these directly reduce the tax you owe like the child tax credit or Earned Income Tax Credit consider filing strategies if you're married you might want to see whether filing jointly or separately works better for your situation hopefully this gave you a clear understanding and made taxes a little less painful if you have any questions leave them in the comments if you found this helpful go like And subscribe and remember the IRS sucks [Music]