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.

[Vanessa · Accepted solution]

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