The term tax table refers to a chart that displays the amount of tax due based on income received. Tax tables help taxpayers determine how much tax they owe and how to calculate it when they file their annual tax returns. The IRS provides different tax ranges in the tax table by tax filing status. Tax rates may be shown as a discrete amount, a percentage rate, or a combination of both. Tax tables are used by individuals, companies, and estates for both standard income and capital gains. They are updated annually.
Key Takeaways
- A tax table is a chart that displays the amount of tax due based on income received.
- The IRS provides tax tables to help taxpayers determine how much tax they owe and how to calculate it when they file their annual tax returns.
- Tax tables are divided by income ranges and filing status.
- Tax tables are commonly used by individual and corporate taxpayers with modest income levels while high-income earners use more detailed tax rate schedules.
- Tax tables are updated by the IRS every year.
How Tax Tables Work
Business and individual taxpayers pay an effective tax rate on their income every year. The tax paid by each entity depends on a number of factors, such as:
- Filing status (single, married filing separately, married filing jointly, or head of household)
- Applicable tax deductions and credits
- Exemptions
- The amount of income earned in a given tax year
Based on these factors and the tax rates set for the year, taxpayers and taxing authorities can determine the amount of tax to be paid by each taxpayer.
A typical tax table shows breakpoint income levels, above and below which different tax rates will apply. But the income used in tax tables is taxable income—not the gross income. Taxable income refers to gross income minus deductions. Thus, only the dollar amount left after factoring in deductions is subject to income tax.
For example, the standard deduction for 2022 is $12,950 for single taxpayers ($13,850 for 2023). A taxpayer who earns $65,000 for the year and only qualifies for the standard deduction pays income tax on $52,050 ($65,000 - $12,950) in 2022. Generally speaking, the higher a taxpayer’s taxable income, the more they are taxed.
Tax tables are set up with different columns for each filing status and rows of various taxable income amounts on the left. A person’s tax liability can be traced on the table based on their tax filing status and the amount transferred to the individual’s income tax form.
Qualifying widows or widowers can use the married filing jointly category for at least two years following the death of their spouses.
Special Considerations
Tax tables are commonly used by individual and corporate taxpayers with modest income levels. High-income earners tend to use more detailed tax rate schedules in conjunction with itemized deductions.
Most states use tax tables to determine personal income tax. The states that do not assess personal income tax are Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming. New Hampshire only assesses a tax on dividend and interest income.
As noted above, tax tables change from year to year and vary from state to state. Investors should always be sure that they use the correct tax tables based on their income sources and area of residence.
Example of a Tax Table
As noted above, the IRS provides updated tax and earned credit tables each year. It provides a tax range based on income levels and divides the amount owed based on your tax filing status.
The following is the tax table for taxpayers who fall in the $46,000 taxable income range for 2022:
| If your taxable income is between | Single Filer | Married Filing Jointly | Married Filing Separately | Head of Household |
|---|---|---|---|---|
| $46,000 and $46,050 | $5,743 | $5,112 | $5,743 | $5,230 |
| $46,050 and $46,100 | $5,754 | $5,118 | $5,754 | $5,236 |
| $46,100 and $46,150 | $5,765 | $5,124 | $5,765 | $5,242 |
| $46,150 and $46,200 | $5,776 | $5,130 | $5,776 | $5,248 |
| $46,200 and $46,250 | $5,787 | $5,136 | $5,787 | $5,254 |
| $46,250 and $46,300 | $5,798 | $5,142 | $5,798 | $5,260 |
| $46,300 and $46,350 | $5,809 | $5,148 | $5,809 | $5,266 |
| $46,350 and $46,400 | $5,820 | $5,154 | $5,820 | $5,272 |
| $46,400 and $46,450 | $5,831 | $5,160 | $5,831 | $5,278 |
| $46,450 and $46,500 | $5,842 | $5,166 | $5,842 | $5,284 |
| $46,500 and $46,550 | $5,853 | $5,172 | $5,853 | $5,290 |
| $46,550 and $46,600 | $5,864 | $5,178 | $5,864 | $5,296 |
| $46,600 and $46,650 | $5,875 | $5,184 | $5,875 | $5,302 |
| $46,650 and $46,700 | $5,886 | $5,190 | $5,886 | $5,308 |
| $46,700 and $46,750 | $5,897 | $5,196 | $5,897 | $5,314 |
| $46,750 and $46,800 | $5,908 | $5,202 | $5,908 | $5,320 |
| $46,800 and $46,850 | $5,919 | $5,208 | $5,919 | $5,326 |
| $46,850 and $46,900 | $5,930 | $5,214 | $5,930 | $5,332 |
| $46,900 and $46,950 | $5,941 | $5,220 | $5,941 | $5,338 |
| $46,950 and $47,000 | $5,952 | $5,226 | $5,952 | $5,344 |
Related Terms: income tax, capital gains, filing status, tax deductions, tax credits, effective tax rate.
References
- Internal Revenue Service. “IRS Provides Tax Inflation Adjustments for Tax Year 2022”.
- Internal Revenue Service. “IRS Provides Tax Inflation Adjustments for Tax Year 2023”.
- Internal Revenue Service. “Publication 501: Dependents, Standard Deduction, and Filing Information”, Page 9.
- Tax Foundation. “State Individual Income Tax Rates and Brackets for 2022”.
- Internal Revenue Service. “1040 and 1040 - SR”, Page 8.
