# ‘Merica and Income Taxes

Cot damn taxes! The one thing we can all agree on — nobody likes them. But, they are a necessary evil in life, like doing the dishes or watching an entire season of a show just because you’re too invested to stop now.

So, let’s talk about US tax rates. The federal government has a sliding scale of tax rates based on how much money you make. This is called a **progressive tax rate system**, which means that the more you make, the higher your tax rate is.

Your **marginal tax rate is the tax rate applied to your last dollar of income**. So, if you’re making $100,000 and your marginal tax rate is 32%, that means the last dollar you make is taxed at 32 cents.

Your **effective tax rate, on the other hand, is the average tax rate you pay based on your total taxable income.** So, if you made $100,000 and your effective tax rate was 22%, that means you paid $22,000 in taxes.

For the tax year 2021, the federal income tax rates for individuals are as follows:

- 10%: The government will take 10 cents of every dollar you make up to $9,950 (or $19,900 if you’re married and filing jointly).
- 12%: The next tier is 12 cents of every dollar you make from $9,951 to $40,525 (or $19,901 to $81,050 if you’re married and filing jointly).
- 22%: The government then takes 22 cents of every dollar you make from $40,526 to $86,375 (or $81,051 to $172,750 if you’re married and filing jointly).
- 24%: The government then takes 24 cents of every dollar you make from $86,376 to $164,925 (or $172,751 to $329,850 if you’re married and filing jointly).
- 32%: The government then takes 32 cents of every dollar you make from $164,926 to $209,425 (or $329,851 to $418,850 if you’re married and filing jointly).
- 35%: The government then takes 35 cents of every dollar you make from $209,426 to $523,600 (or $418,851 to $628,300 if you’re married and filing jointly).
- 37%: And finally, if you make more than $523,600 (or $628,300 if you’re married and filing jointly), the government will take 37 cents of every dollar you make.

So, there you go — the US tax rate breakdown. Just remember, taxes are like a necessary evil in life. But, hey, at least you’re contributing to the greater good. Or, you know, the government’s new billion dollar widget.

Hey there, I am soldier turned engineer turned data scientist turned financial advisor. If you ever have question about a financial topic or if you are in the market for a real good financial advisor, come check me out. linktr.ee/lampfinancial