Federal Income Tax Rate in Texas: 2019
Everyone must pay their federal taxes in the United States. Some states, however, offer more leeway than others do. The state of Texas, for example, does not charge an additional income tax; you will have to pay a .375% franchise tax if you run a business. You also do not have to pay estate or inheritance taxes, and counties determine if you have to do so for real estate or personal property.
Every state will see some changes with the 2018 tax legislation. People will have to pay differing amounts due to what the can and cannot write off in their return. Your income will determine part of that, of which tax bracket you will fill.
Your 2019 federal tax return will be due on April 1, 2020. If you get an extension, you will have to turn it in by October 1, 2020. Rates have slightly changed, so we’ll discuss the basics for what you need to know.
Federal Income Tax Brackets
How do tax brackets work? They work on dividing your income into taxable amounts so that you are not paying the same rate uniformly. Instead, you pay the amount by which the maximum in each bracket. The brackets are as follows: 10% for $9700, 12% for $39,475, 22% for $84200, 24% for $160,725, 32% for $204,100, 35% for $510,300 and 37% for any amount above $510,300. The more income you earn, the more brackets you fill.
Confused? Maybe a concrete example will help. Let’s say that you earn 10,000 a year in USD. That puts you in the first marginalized bracket, which pays a ten percent margin rate. You only pay ten percent, however, on $9700 of that income, or $970. The remaining $300 is taxed 12%, or $360. Your total thus is $1360 to pay in taxes.
For salaried employees, the good news is that employers automatically deduct taxes from your paycheck. You then have that withheld amount to assist with paying taxes for the following year. In some cases, you may even get a refund if your income is below a certain amount.
Freelancers, business owners, and entrepreneurs are a different story. If you are freelancing, that must mean you do the withholding for taxes. That means also factoring in various income streams and seeing which amounts contribute to your total.
Find Out More About Federal Taxes From Success Tax Relief
Success Tax Relief wants to help you learn more about taxes. We cover the differences in each state and can educate you on the changing policies. You won’t have to rely solely on e-filing providers or the local library. We can help you pay at the right rate, on time.
Contact us today to get started on filing your taxes. We’ll be happy to help you in any state and get started on your filings for 2020. Our experts know the ins and outs of tax laws and can help you save on costs in the long run.