IRS: Your Taxes In 2016

IRS Tax Brackets 2016: What You Need to Know

Image source: Author.

To paraphrase Ben Franklin, death and taxes are certainties. But while death tends to happen only once, taxes happen relentlessly. Every. Single. Year.

(1) Dealing with taxes is a recurring pain, no doubt. But we can lessen the pain by taking steps to be in a better position to deal with them early. (Need the 2015 tax brackets? Go here). By the way, it’s not just people who’ve had to write a fat check on April 15 who should understand this, but also anyone who gets a refund every year.

Instead of giving the government an interest-free loan, why not take more money home each payday? Understanding the tax brackets can help you do that, too.

Without further ado, here’s a breakdown of the IRS tax brackets for 2016.

(2) Marginal tax rates for 2016
There are seven tax brackets and four filing statuses. Here are each of the income tax brackets by filing status for 2016:

Single filing status:

Over But not over of the amount over
$0 $9,275 na + 10% $0
$9,275 $37,650 $927.50 + 15% $9,275
$37,650 $91,150 $5,183.75 + 25% $37,650
$91,150 $190,150 $18,558.75 + 28% $91,150
$190,150 $413,350 $46,278.75 + 33% $190,150
$413,350 $415,050 $119,934.75 + 35% $413,350
$415,050 $120,529.75 + 39.6% $415,050

Table by author: Data source: IRS.

Head of household:

Over But not over of the amount over
$0 $13,250 na + 10% $0
$13,250 $50,400 $1,325 + 15% $13,250
$50,400 $130,150 $6,897.50 + 25% $50,400
$130,150 $210,800 $26,835.00 + 28% $130,150
$210,800 $413,350 $49,417.00 + 33% $210,800
$413,350 $441,000 $116,258.50 + 35% $413,350
$441,000 $125,936.00 + 39.6% $441,000

Table by author. Data source: IRS.

Married filing jointly or qualifying widow(er):

Over But not over of the amount over
$0 $18,550 na + 10% $0
$18,550 $75,300 $1,855 + 15% $18,550
$75,300 $151,900 $10,367.50 + 25% $75,300
$151,900 $231,450 $29,517.50 + 28% $151,900
$231,450 $413,350 $51,791.50 + 33% $231,450
$413,350 $466,950 $111,818.50 + 35% $413,350
$466,950 $130,578.50 + 39.6% $466,950

Table by author. Data source: IRS.

Married filing separately:

Over But not over of the amount over
$0 $9,275 na + 10% $0
$9,275 $37,650 $927.50 + 15% $9,275
$37,650 $75,950 $5,183.75 + 25% $37,650
$75,950 $115,725 $14,758.75 + 28% $75,950
$115,725 $206,675 $25,895.75 + 33% $115,725
$206,675 $233,475 $55,909.25 + 35% $206,675
$233,475 $65,289.25 + 39.6% $233,475

Table by author. Data source: IRS.

Don’t forget deductions
It’s important to note that the tax brackets above are based on your taxable income, not your gross income. In other words, if you have common deductions such as mortgage interest, charitable donations, and pre-tax contributions to a retirement plan, you’ll need to factor those out of your total income before the rate schedules above do you any good.

(3) Food for thought: Marginal versus effective tax rates
The American federal income tax system uses a progressive marginal tax rate, which increases the tax rate with income, as you can see in the tables above. This may mean paying a different “effective” tax rate than someone else in the same bracket.

For example, a married joint filer earning $75,300 would pay $10,367.50, which works out to a 13.8% tax rate. A filer in that same bracket with $100,000 taxable income would pay $16,542.50, for a 16.5% effective tax rate, since they are paying the same 13.8% on their first $75,300, and 25% on the $24,700 above that amount.

Tax brackets only the start to making sure you don’t pay too much
One of the best ways to use the information above is to figure out how much tax you’ll owe for next year and make sure your employer deducts the correct amount and not a penny more. You may not get a refund come tax season, but that’s just the government giving you back money you didn’t owe.

(4) I’m sure most people* can think of uses today for that cash, whether it’s paying off debt, saving for a rainy day, or increasing retirement savings, just to name a few. Most importantly, by taking steps today to set yourself up for a tax-neutral 2016, you’ll avoid the stress of finding out you owe Uncle Sam a pile of cash come April 2017.

Source: foxbusiness.com

THE SPOTLIGHT:

irs“Life and the solution to it is very simple. We humans make it complicated and chaotic, then fight to defend and justify the complication and chaos” -Terry Fairley, Inc.

(1) So, dealing with taxes is a recurring pain? I doubt that, based on how most (repeat…most) Americans are willing to pay it. Because if it is a recurring pain, why PAY IT?! It seems to me no one getting a good service from it.

However there is a better way. You can do all that stuff you just read above, or you can pay taxes in a whole different way.

(2) Speaking on “tax brackets”, I think this is the part where “paying your fair share” comes in, because if you ask me, no one knows what anyone’s fair share is unless you ask about their income. You’d have to ask how much they make, and trust that they’re telling you the truth. But how can they be honest about how much they make to a system that was built on a lie?

So let’s look at this, seven tax brackets. Wondering which one you fall on after all deductions and write offs, what tax bracket do you believe you fall on?

How about this, I’ll offer you a better deal; why don’t we eliminate these tax brackets once and for all, you no longer worry about how much “income” is taxable, and actually pay one particular tax which will be the one final tax you pay voluntarily each time you make a retail transaction? In other words, you no longer have to “wonder” what next week’s tax decision or requirements is anymore. Or, you can continue doing what you’re doing, and hopefully don’t screw up telling the “boss” government any mistake that you’ve made on your filings.

(3) “The American federal income tax system uses a progressive marginal tax rate, which increases the tax rate with income, as you see in the tables above. How many of you are a fan of Karl Marx? Well obviously the IRS is, however, those who support an income tax system may actually agree with Mr. Marx and not even know it. That’s right, the progressive income tax goes in line with the 2nd Plank of this particular system.

However, agree with him or not, there’s nothing right or wrong about it. But it’s important to be aware of the original idea of it, then determine if it’s aligned with your personal beliefs.

Now I do have a personal problem with the “married joint filer” thing. How do the government and the IRS know I’m married? Ah, the “marriage license”. So just like a “driver’s license” gives you permission from the government to operate a motor vehicle on public roads (or so they say), and “fishery license” gives you permission to fish at municipal and state operated bodies of water. License inĀ  general gives you permission to utilize and/or operate a property that belongs to someone, or another entity. So to me a marriage license is basically a business deal, sort of like a “merger” between you and your partner, and getting permission from another entity to play “House” legally. However, it does come with a price, and in this case, financial. It really doesn’t matter if you two get along or not, there’s a credit in the tax codes for both of you. And if you decide to sell (divorce), there’s also a price for that too.

Let’s look at some more numbers shall we?

earning $75,300 would pay $10,367.50, which works out to a 13.8% tax rate. A filer in that same bracket with $100,000 taxable income would pay $16,542.50, for a 16.5% effective tax rate, since they are paying the same 13.8% on their first $75,300, and 25% on the $24,700 above that amount“.

This is insane! To me that’s for someone who’s trying to figure out trigonometry during a transaction when someone is asking for change of a product that’s $17 and they gave a $20. The only thing that should be involved in this situation is $3 bucks.

I don’t know about you, but I adore simple math. However, I started to abhor it up into 6th grade (to me public schools like to make simple life’s skills complicated, especially math). Everyday applied math is simple; (1+1=2), (5×5=25), (25/5=5), and 1/4=25. All I had to do was understand the fundamentals, and math gave me what it was, and that simple math help me grow successful businesses. It didn’t matter how I felt about it, what my political philosophy was, what my religious and spiritual beliefs were, or what ethnicity or country I was from, math equates and balances out everything in existence including money. My problem with the current tax codes is nothing NEVER adds up, and it never balances out, for if it did, there wouldn’t be nobody wondering if so-and-so “paid their fair share”, especially when they have no idea what it is.

These numbers is like everyone at the counter trying to figure out favored “trigonometry” from 300 million points of views instead of keeping it simple and seeing a $17 product, you give a $20 bill, and you get back $3. No one’s fighting, you got your product, business got their $17, everyone’s happy. And the best thing, you don’t care who’s married, and even if they were, their marital status won’t stop you from buying that product, and has nothing, NOTHING to do with you.

And last, this is my favorite part to dissect…

“I’m sure most people* can think of uses today for that cash, whether it’s paying off debt, saving for a rainy day, or increasing retirement savings, just to name a few”.

I want to start off on this by saying this is America. And in the America I know, it has multiple choices. And those choices comes from multiple options. One of those options this article’s not mentioning is STARTING A BUSINESS. I’m not surprised that “financial news” don’t usually mention it as part of that option, but it do exist. And yes, I’m definitely sure most people can think of ways to use their cash. You can use it however you want, but I don’t want this to be a contradicting advise. I believe you know more about how to take care of your financial affairs better than any government including this one. If you choose to utilize a financial adviser, planner, or family member to take care of your money for you, that’s a better option than having government force you (under penalty of imprisonment) to do it for you.

There’s nothing wrong with saving anything for a “rainy day”. However, it depends on your version of “rainy day”. Mainstream media has packaged it as a day where all that money will go towards an unfortunate event where it will require a massive amount of money to take care of.

Well I don’t subscribe to that version. I subscribe to THE rainy day where my money attracts more money to rain in all day. That rainy day is when I’m making so much money in one day, it’s literally “raining”.

Now how would YOU like some of that rainy day fund?!

Then turn off the boring “everyone else” mainstream sludge that’s been giving you the same damn advise over and over. For if it was helping the “mainstream”, we wouldn’t have known about a financial crisis a few years ago. Not trying to say the media is responsible for people losing their nest egg or money, all I’m saying is for you, the reader, to not look at just one advise, take it, and run with it. They (the media) have a job to do, to sell you a product that’s going to keep you from not thinking for yourself, especially when it comes to your money.

I recommend staying on the hedge and hearing from both sides of the coin; financial news from the mainstream and from the wealthy. Not saying you should be wealthy for that’s totally up to you, but at least you’d be armed with options and understanding where you can hear and see right through the so-call “financial gurus”. Then understand what money IS from various points of views. Don’t be afraid of it anymore. No more playing “hot potato” with your financial affairs. It’s YOURS!

The IRS has a purpose. They have a job to do too. They make math and earning a living COMPLICATING. Wouldn’t you agree?

I feel good about America’s financial and economic position. I believe the IRS days are numbered, and all that mambo jumbo above is about to go away forever real soon.

I see jobs about to make a comeback and everyone in this country getting their personal and financial sovereignty back! I see an America where you my friend, will not have to spend unnecessary hours, time and money worrying about such a draconian system prying through your personal life by staying “compliant” with them when they never been compliant with you regarding the Constitution.

If you are a defender and fan of the U.S. Constitution prior to 1870, you’ll be able to see that the 16th Amendment is a direct contradiction to the 10th Amendment (state’s rights), and Article I, Section 8 of the Constitution that really doesn’t need defending, for it can defend itself. I recommend reading the United States Constitution for ALL citizens, for that is the owner’s manual (owner meaning you) on how this country shall be governed. And as long as you have the IRS, and the 16th Amendment, you are not an owner, but a slave to your own assumption of why you believe you are REQUIRED to pay an income tax in the first place.

….in the name of “patriotism” of course.

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In closing, the $1.5 trillion question remains; is there a LAW in black and white that requires YOU, the American citizen, to pay a federal income tax?

I did my own research BECAUSE I’M AN AMERICAN CITIZEN. I have a human right to question authority, and I recommend you to do the same. Fortunately, I found out I wasn’t the only one.

It’s empowering to hear both sides to come to your own conclusion regarding the federal income tax. Check out this video below…

Or, you can believe that you still owe. There will always be a contrast of people that will still believe that if they’re “earning $75,300 would pay $10,367.50, which works out to a 13.8% tax rate….they have to pay, or be thrown in jail. They must be allowed to believe that, and they have the right to believe that. Unfortunately what we have under the IRS on their behalf, is a direct violation of YOUR RIGHTS for believing in your sovereignty guaranteed by the Constitution. Fortunately however, there is a law that will cease this perversion of the REAL law of the land.

Check out the other TAX OPTION HERE…

What’s your thoughts on this? Share it in the comments below…

 

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