Calculators: Tax Guide

What's Your Average Tax Rate?
By SmartMoney.com Staff
Updated on January 23, 2009

SO YOU'RE ANGRY that big bonus knocked you into the 33% tax bracket? Well, if it's any consolation, you don't have to pay the 33% tax rate on all your income. That's because you're only taxed at the 33% rate on income beyond a certain threshold — $171,550 for a single filer in 2009. Those who are married, filing jointly don't reach the 33% mark until $208,850. Income up to that point is taxed at the lower rates of 10%, 15%, 25% and 28%. So, your average tax rate is actually much lower than the highest rate you pay. Here's how it works.

• Click here to see the calculator below.

Say, you're single and have taxable income of $185,000 in 2009. And let's say your gross income was $210,000. Well, your income up to $8,350 is taxed at 10%. From $8,351 to $33,950 is taxed at 15%. From $33,951 up to $82,250, it's taxed at 25%. From $82,251 to $171,550, the rate is 28%. And you'll pay 33% on the remaining $13,450. (The top rate, 35%, kicks in at $372,951 for singles.) In this case, your average tax rate (the proportion of gross income you'll pay in taxes) is about 22%.

Plug your own numbers into our calculator to find your own average tax rate and see how it changes at different income levels.