With the 2015 income tax season right around the corner, it’s time to start preparing. One of the first things to know when preparing for your taxes is to identify which income tax bracket you are in. The IRS defines a tax bracket as the portions that are taxed out of your income. The higher your income, the higher the percentage is taken out. With new inflation, the income tax bracket 2015 regulations have changed. So, we would like to help you make sure you are aware of what tax bracket you are in and how you can get the right deductions.
What Income Tax Bracket 2015 Are You In?
The purpose of income tax brackets is to show how much you owe for how much you make. The progressive tax system works to make sure each tax payer pays a fair percentage. The higher your income, the higher percentage you pay in taxes.
Each year the IRS changes tax brackets from past years’ inflations. It does not change from last year, it changes after analysis of different years.
Not only does your income amount matter, but how you are filing it. Filing as a single, married joint or head of household changes your income tax rates.
If you are interested to see what income tax bracket 2015 you fall in, Tax Foundation has the bracket and rates for single, married joint and head of household filers.
Income Tax Bracket Deductions
Now that you know what income tax bracket 2015 you are in, find out what tax deductions you qualify for. Due to inflation, standard tax deductions are increasing, which means more money for filers from last year. For single and married, but filing separately filers, receive $6,300 back from standard deductions; married and filing jointly and surviving spouse filers receive $12,600 back; head of household filers receive $9,250 back.
Other deductions work more for those in higher income tax brackets. Deductions are the reasons why it is important to save your receipts. If you are in a high income tax brackets in 2015, you can receive deductions from work related costs. For example, say you fall into the 35% tax bracket as a single filer. You lose 35% of your income in taxes, but when filing taxes, you can add deductions.
An example of a deduction can be dry cleaning. If your job requires you to look professional, you might need to have dry cleaning, something you would not have needed as much in a different job. If you pay $1,500 a year for dry cleaning, you multiply that by the 35% and deduct that from end of the year taxes.
Another example is if your job requires you to travel, you can receive deductions. Say you are in sales and you need to travel to clients. You can be compensated for that gas money you spend on driving.
For more help finding what tax bracket in 2015 you are in, DeFreitas & Minsky Certified Public Accountants can help you sort everything out. We’ll work with you to receive the deductions you need to receive the tax money back that you deserve. Call us at 516.746.6322 for more information.