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2013 Federal Income Tax Brackets And Marginal Rates





When you file your federal income tax return before April 2013, you're filing your 2012 taxes, and the 2012 income tax brackets define the amount of tax you owe to the government before credits and after-tax adjustments. The first paycheck or consultancy fee you earn in 2013 falls under new rules, however. The 2013 income tax brackets apply to money you earn during that year, although you may not notice how this affects you until you file your income taxes in early 2014. If you pay estimated taxes throughout the year, you may be more aware of the change in brackets.

At this time, however, with the political scene in flux as we prepare for an election and with a Congress that has not yet made clear what the situation will be in 2013, The Tax Foundation can only make predictions about the coming year's tax rates.

These are the three most likely scenarios for 2013 tax brackets:

  • The extension of the Bush-era tax cuts for all taxpayers.
  • The expiration of the Bush-era tax cuts for all taxpayers.
  • The expiration of the Bush-era tax cuts for taxpayers with high incomes.

Because these three proposals already exist and are detailed enough to draw predicted tax brackets, it's easy to present the scenarions and be relatively confident about the results for taxpayers under each.

Whoever is sworn in as the next President of the United States will influence Congress, and the possibility of changes to any of the existing proposals are still possible. So while the following tax bracket scenarios are likely, there is still a chance that the final law will deviate from each of these predictions.

Scenario 1: Tax cuts under the extension of the Bush-era tax cuts for all

Rate

Single Filers

Married Joint Filers

Head of Household Filers

10%

$0 to $8,950

$0 to $17,900

$0 to $12,750

15%

$8,950 to $36,250

$17,900 to $72,500

$12,750 to $48,600

25%

$36,250 to $87,850

$72,500 to $146,400

$48,600 to $125,450

28%

$87,850 to $183,250

$146,400 to $223,050

$125,450 to $203,150

33%

$183,250 to $398,350

$223,050 to $398,350

$203,150 to $398,350

35%

$398,350 and up

$398,350 and up

$398,350 and up

Scenario 2: Tax brackets under the expiration of the Bush-era tax cuts for all

Rate

Single Filers

Married Joint Filers

Head of Household Filers

15%

$0 to $36,250

$0 to $60,550

$0 to $48,600

28%

$36,250 to $87,850

$60,550 to $146,400

$48,600 to $125,450

31%

$87,850 to $183,250

$146,400 to $223,050

$125,450 to $203,150

36%

$183,250 to $398,350

$223,050 to $398,350

$203,150 to $398,350

39.6%

$398,350 and up

$398,350 and up

$398,350 and up

Scenario 3: Tax brackets under the expiration of the Bush-era tax cuts for high-income

Rate

Single Filers

Married Joint Filers

Head of Household Filers

10%

$0 to $8,950

$0 to $17,900

$0 to $12,750

15%

$8,950 to $36,250

$17,900 to $72,500

$12,750 to $48,600

25%

$36,250 to $87,850

$72,500 to $146,400

$48,600 to $125,450

28%

$87,850 to $183,250

$146,400 to $223,050

$125,450 to $203,150

33%

$183,250 to $203,600

$223,050 to $247,000

$203,150 to $227,300

36%

$203,600 to $398,350

$247,000 to $398,350

$227,300 to $398,350

39.6%

$398,350 and up

$398,350 and up

$398,350 and up

Keep in mind that the tax rates listed in these tables are marginal rates. That means that you do not owe your rate on all of your income. For example, if you single, you earn $100,000 per year, and Scenario 2 (tax cuts expire for all) is the prevailing law, you would not owe 31% on all of your income - you would not owe $38,000 to the federal government. You would owe 15% of 36,250, 28% of $51,600 (the difference between the top and the threshold of the second tax bracket), and 31% of $12,150 (the difference between your income and the threshold of the third tax bracket).

That calculation results in $5,437.50 plus $14,448 plus $3,766.50, or $23,652. That's an effective tax rate of about 23.7% before your credits are taken into account, assuming your taxable income is the same as your gross income. Your effective tax rate could be much lower if deductions have already reduced your taxable income to $100,000 from a larger gross income. For example, if a 401(k) contribution reduced your taxable income from $115,000 to $100,000, you would still use the same tax calculation I've described here, but your effective tax rate would be 20.6%.

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