March 18, 2016
Accountants and other tax professionals use tax brackets to determine how the IRS will assess taxes. eTax.com offers a specialized tool called the "Tax Bracket Calculator" which allows taxpayers to easily determine which bracket is most appropriate for their income level.
In theory, taxpayers would multiply their taxable income by the percentage amount in their respective tax bracket. However, it's generally not that simple. Essentially, the higher the tax bracket, the higher the taxes. Though figuring out the exact amount of taxes to be assessed can vary as income levels exceed certain tax brackets.
eTax.com's tax bracket calculator asks for simple data input including filing status, expected annual income, and estimated amount of deductions. The calculator figures the amount of income which will be taxed and the tax bracket in which that income falls. In addition, an easy to read chart is available on the website to assist taxpayers in understanding the different income limitations for each bracket by filing status.
Knowing one's tax bracket can come in handy when making large purchases, such as buying a new home. Different tax savings are offered to taxpayers who fall in specific tax brackets, so it's important to know to maximize benefits at tax time.
"Tax brackets are dependent on filing status." explained Paul Stanley of eTax.com. "eTax.com offers a filing status calculator as well, so taxpayers can find their appropriate status and know which they should use to calculate their appropriate tax bracket as well."