Personal income tax rates of 10, 15, 25, 28, 33, 35 and 39.6 percent remain in place for filing next April. (The more you made, the greater your percentage.) The standard deduction for 2016 income will stay the same: $6,300 if you file your taxes using the status single or married filing separately. Married joint filers still receive a $12,600 deduction; head of household filers’ deduction jumps $50, to $9,300.
| Table 1. 2016 Taxable Income Brackets and Rates (Estimate) | |||
| Rate | Single Filers | Married Joint Filers | Head of Household Filers |
|
10% |
$0 to $9,275 | $0 to $18,550 | $0 to $13,250 |
|
15% |
$9,275 to $37,650 | $18,550 to $75,300 | $13,250 to $50,400 |
|
25% |
$37,650 to $91,150 | $75,300 to $151,900 | $50,400 to $130,150 |
|
28% |
$91,150 to $190,150 | $151,900 to $231,450 | $130,150 to $210,800 |
|
33% |
$190,150 to $413,350 | $231,450 to $413,350 | $210,800 to $413,350 |
|
35% |
$413,350 to $415,050 | $413,350 to $466,950 | $413,350 to $441,000 |
|
39.6% |
$415,050+ | $466,950+ | $441,000+ |
With the brackets (not rates) nudging upwards, taxes should decrease for many taxpayers, which is good news for you and may provide some relief.
Note that these rates personal income tax rates are applicable to the 2016 tax year which means they are effective January 1, 2016. These will not apply to your 2015 returns.
Tactics for Utilizing the most out of Personal Income Tax Rates
Year-end tax-saving tactics include spreading recognition of your income between years by postponing year-end bonuses and maximizing both deductible retirement contributions and allowable retirement distributions for this calendar year, coordinating capital losses against the sale of appreciated assets, postponing redemption of U.S. Savings Bonds, and delaying your year-end billings and collections.
