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My 2018 Taxable income was 98k. According to the federal tax bracketts I am in the 24% tax brackett, yet I paid 16.22%. Why? Not complaining, just planning.
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June 4, 2019
7:26 PM
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Get your taxes done using TurboTax
Your tax bracket is the top rate that a part of your income is taxed. So if you are single, the entire $98K is not taxed at 24% only a portion of it is, the tax bracket also does not account for any credits you may receive.
Your income is taxed in levels. So your effective tax rate is 16.22%
The first $9525 is taxed @10%
The amount between $9,525 and $38,700 is taxed at
From $38,700 to $82,500 is taxed at 22%. The amount over the $82,500 is the only part that is taxed at 24% in your case if you're single.
See link below.
https://turbotax.intuit.com/tax-tips/irs-tax-return/current-federal-tax-rate-schedules/L7Bjs1EAD
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June 4, 2019
7:26 PM