Money Minute: Explaining tax brackets
PITTSBURGH (KDKA) -- Income tax brackets can be really confusing, so in this week's "Money Minute," KDKA-TV money editor Jon Delano shares a little tax bracket 101.
Federal income tax brackets can be really confusing. Unlike Pennsylvania's flat tax where everyone pays 3.07% of their income to the state, the United States has a graduated tax, meaning the more money you make, the higher the percentage the government takes of your income.
Right now, we have seven income tax brackets, from 10% to 37%, with most families in either the 12% or 22% bracket.
The income limits for each bracket vary, depending on how you file, like as a single person or as a married couple filing jointly.
For example, a single person enters that 22% tax bracket with income of just under $45,000, while a married couple gets taxed at that rate at just over $89,000.
There was a time as recently as 1960 when the mega-rich paid a lot more. Every dollar they earned over $2 million was taxed at 91%. Today's top tax rate is 37%.
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