What are Tax Tables?

When you have a taxable income of $100,000 US Dollars (USD) or less, you are often required in state and federal tax documents to look up the tax you should pay on this amount. These tax tables help you figure out exactly what you owe, and can then be compared to what you paid. For income tax returns, tax tables organize tax amounts by tax bracket and total income, and also use the top of the table to look up your tax based on what kind of taxpayer you are. If you’re married filling a joint return, your taxes may be lower or higher than if you are single, married filing separate returns, or a head of household. So you have to be sure to match the top filing status with your income.

Tax tables may unduly alarm people new to filing their income taxes because they look up their taxes before figuring their taxable income. This is a quick road to panic and despair, since the number of deductions you can take will frequently change your taxable income amount. If you follow directions on forms like the Internal Revenue Service (IRS) 1040, or 1040 A or EZ, do yourself a favor and avoid the tax tables for estimating tax until you are directed to do so.

Furthermore, many people are entitled to take deductions or tax credits directly from the taxes they owe. So tax tables don’t necessarily give you all information about what you will owe in taxes. A lot of people find their tax derived from a tax table is inadequate because they can still take things like child tax credits, which are subtracted from the amount gleaned from a tax table.

There are other tax tables that can be used by the IRS or by state governments. Corporate tax forms may have tables or worksheets. If you read through instructions for filling out a tax form, you may look at a number of tables, which help you determine tax, eligibility for credits, or specific types of tax on certain types of earnings. Corporations may also be instructed to evaluate certain tax tables when figuring out their tax.

Those who make more than $100,000 USD in the US may not use tax tables to figure out their income tax. Instead they may calculate tax based on math formulas, worksheets or many other methods. The most often used tax table in 1040 documentation, that used to figure tax, ends at $100,000 USD. If you make more than this amount in taxable income, you are instructed to use a Tax Computation Worksheet, available in the 1040 instructions, in order to calculate tax.