Income Taxes

Not many people, except perhaps certified public accountants and IRS employees, like taxes. But we all have to pay them sooner or later, whether it's through income taxes, payroll taxes, or sales taxes. The positive side of taxes is that they support everything from schools and roads to social services and law enforcement.

The more you know about taxes, the less burdensome they may seem. Here are some basic facts to help you better understand our income tax system.

Income tax brackets

The United States income tax system is progressive, meaning your income is first taxed at the lower rates but as your income increases, it gets taxed at gradually higher rates. The rates are also different depending on whether you're a single filer or married filing jointly.

Here are the basic income tax brackets. For more details on tax brackets, see the IRS Federal income tax rates and brackets.

Ways to reduce your tax bill

Your taxable income is usually lower than your actual income. That's because there are certain ways to lower your tax bill through deductions, exemptions and credits, including:

• Making a contribution to your retirement account
   
• Making a charitable contribution
   
• Getting a credit for dependent care
   
• Qualifying for the earned income tax credit

Learn about various deductions and credits and how to calculate your tax due. Please note that the ability to claim any given tax deduction or tax credit varies depending on a range of factors including your age, income, and filing status. Need help? Talk with a tax advisor who can help you with specific advice for your situation. 

Who needs to file a federal income tax return?

Not everyone is required to file a tax return. But even if your income falls below the filing requirement, you could benefit from filing a return. Every year, many low-income people forfeit tax refunds simply because they didn't file a return. To quickly find out if your income is below the filing requirement, go to the IRS withholding calculator