Taking effect beginning with the 2018 tax year, the Trump administration's Tax Cuts and Jobs Act enacted sweeping tax reform for U.S. residents, changing tax rates and income brackets across the board and affecting everything from the standard deduction to tax credits for parents. While these changes won't affect the method or formula you use to calculate the taxes taken from your gross earnings or hourly wage, they do affect some of the numbers you plug in to those equations – if you're doing it all by hand, that is. Lucky for you, longform calculation isn't really needed in 2019.
2019 Income Tax Brackets
In the U.S., federal taxes now start at 10 percent of your gross income and cap out at 37 percent. The rate at which you are taxed depends on how much gross income you earn in a year, with various income ranges falling into specific tax brackets. Here's a look at tax brackets and rates for the 2019 tax year, depending on your filing status. The numbers below include the tax rate (as a percentage), then list the range for adjusted gross income for individuals in various filing categories:
- 10% rate: $0 - $9,525 for unmarried; $0 - $19,050 for married joint returns; $0 - $13,600 for heads of household
- 12% rate: $9,525 - $38,700 or unmarried; $19,050 - $77,400 for married joint returns; $13,600 - $51,800 for heads of household
- 22% rate: $38,700 - $82,500 for unmarried; $77,400 - $165,000 for married joint returns; $51,800 - $82,500 for heads of household
- 24% rate: $82,500 - $157,500 for unmarried; $165,00 - $315,000 for married joint returns; $82,500 - $157,500 for heads of household
- 32% rate: $157,500 - $200,000 for unmarried; $315,000 - $400,000 for married joint returns; $157,500 - $200,000 for heads of household
- 35% rate: $200,000 - $500,000 for unmarried; $400,000 - $600,000 for married joint returns; $200,000 - $500,000 for heads of household
- 37% rate: over $500,000 for unmarried; over $600,000 for married joint returns; over $500,000 for heads of household
The Easy Way
The most straightforward, hassle-free way to calculate taxes from your gross or hourly rate is to use a free online calculator that's up to date with current U.S. tax rates and brackets. As of 2019, sites such as H&R Block, SmartAsset and the TaxCaster from Intuit TurboTax all offer this free service – all you need is a browser and a little basic information.
At these sites, simply enter the requested info, such as your tax filing status, family and homeownership details, employment information, income and location. Based on what you made during the tax year and what federal (and, for some sites, state) taxes affect you, the site does all the calculating for you and offers an instant estimate of how much your gross or hourly wage will be taxed. Some sites even factor in applicable tax incentives and credits.
The Old-School Way
Now that you know which tax bracket your adjusted gross income falls into, you can estimate how much you'll be taxed on the federal level, using a little longhand math.
The federal tax brackets are marginal taxes, which means you won't pay a flat percentage on your entire AGI – you'll pay each specific percentage only on what you earned above each bracket's limit. For instance, let's say you're single and earned $50,000 in 2019. You'd break down your taxes like this:
- 10 percent x $9,525 = $952.50
- 12 percent x $29,175 ($38,700 - $9,525) = $3,501
- 22 percent x $11,300 ($50,000 - $38,700) = $2,486
Now add the taxation from each bracket of income to determine your total tax liability:
- $952.50 + $3,501 + $2,486 = $6,939.50
About Payroll Withholding
Things get a little more complicated when you're curious about calculating tax withholding for a specific payroll period, which you may want to do if you're earning an hourly wage from an employer. To get started, you'll need the 2019 edition of IRS Publication 15-A, which you can download for free at IRS.gov.
The tables in Publication 15-A are where the meat of its useful info resides. These tables break down the exact percentage of withholding from different wage brackets for single and married persons earning weekly, biweekly, semimonthly, monthly and even daily or miscellaneous paychecks for wages made in 2019. In particular, the tables entitled "Wage Bracket Percentage Method Tables for Computing Income Tax Withholding from Gross Wages (for Wages Paid in 2019)" starting on page 31 of form 15-A guide you through the exact process of calculating tax withholding based on your specific earnings and allowances.
For instance, if you're a married person earning between $600 and $1,745 with zero allowances on a weekly payroll period, the table instructs you to subtract $289.71 from your gross wage and multiply that result by 12 percent to estimate the tax withholding.
So if you make an hourly wage of $16.75 and work a 40-hour week in 2019 for a gross weekly pay of $670, your formula will start like this:
- 670 - 289.17 = 380.83
Now multiply that result by 12 percent, as directed by the table:
- 380.83 x 0.12 = 45.6996
In this case, $45.70 will be withheld from your $670 weekly paycheck, leaving you with a net amount of $624.30.