As of 2015, individuals must provide their filing status and taxable income in order to use a federal tax rate calculator, according to TaxACT. Once this information is entered, the calculator provides tax rate information.Continue Reading
Before using a federal tax rate calculator, a taxpayer must determine his filing status, explains TaxACT. Filing statuses include single, married filing jointly or qualifying widow(er), married filing separately, and head of household. Individuals must select the status that is applicable to their tax circumstances. Once a filing status is selected, taxable income must be entered into the calculator. Taxable income is determined by taking regularly taxed income and subtracting deductions and exemptions. The calculator evaluates this information and provides an estimate of the tax rate.
A tax rate calculator provides a tax bracket for the amount of income an individual earns, but the actual tax rate may not be the same as the tax bracket percentage, explains International Business Times. Federal tax rates are graduated, meaning the tax rate rises as taxable income goes up. When income reaches a certain threshold, the next chunk of income is taxed at a gradually higher rate, according to Fidelity.
Tax rates may vary by year, and filing statuses may change, depending on alterations made by the federal government. The government usually releases tax brackets for the following year in the fall, states International Business Times.Learn more about Financial Calculations