So you know that whenever you make money from your job, the government gets a chunk of it in taxes 🤑

But how do they decide exactly how much to take?

Tax brackets are ranges of income that are taxed at different rates 💵

Tax brackets are used to calculate the amount of taxes you owe based on your income.

The more money you make, the higher "bracket" you're in, and the higher tax rate you're subject to.

Brackets are named according to their tax rates, for example, "10% bracket", "22% bracket", etc.

For example, if you are a single filer with an income that falls into the 10% tax bracket, you'll pay 10% on your first $9,875 of taxable income in Federal income taxes 🤑

Now, let’s say you make $40K/year! 💪

This means you’re in the 12% tax bracket 🤔

So, you’d pay 10% on your first $10k 💵

Then 12% on the remaining $30k 💰

See how it’s 10% first and then 12% on additional funds past the first $10k? 👀

Instead of applying one tax rate to your total income, tax payments are “bracketed” or split based on income amounts 🥳

This way, you only need to pay higher tax rates on income above certain thresholds, not all of it

If someone is in the 33% tax bracket, they’re only paying 33% on their income above a certain threshold - not all of it 🏛️

Lastly, keep in mind that in most states, you'll need to pay both Federal and State income tax, which each have their own different brackets and tax rates! 💸

To calculate your tax rate, just search "Income tax calculator" on Google, and make sure to put in which state you live in -- there are hundreds of websites that can help you out!