Q: I am planning and researching my retirement. Here is my tax question for tax year 2012.
I am filling single for 2012, my Gross income for 2012 was $60,010.29
I am contributing to my Simple IRA in 2012 $13,650.00
----------------- -
$46,360.29
I paid in 2012 to my ex wife spousal support $ 3600.00
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$42,760.00
I am opening an tax-defered Traditional IRA for 2012 $ 6000.00
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$36,760.29
I have for the 2012 tax year medical bills of $ 3000.00
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$33,760.29
My question is: Do I fall in the IRS inflation adjusted bracket
at 15% because the $35,350?
Or do I still fall in the IRS inflation adjusted bracket at 25%
because the $85,650?
I look forward to hearing from you. Thank you.
A: Your filing status and your taxable income determine which tax brackets you are in. Taxable income is defined as your gross income less adjustments to income, such as your SIMPLE IRA contribution and alimony, less the greater of your standard deduction or itemized deductions, less your personal exemption. The single tax rates for 2012 are as follows:
•10% on taxable income from $0 to $8,700, plus
•15% on taxable income over $8,700 to $35,350, plus
•25% on taxable income over $35,350 to $85,650, plus
•28% on taxable income over $85,650 to $178,650, plus
•33% on taxable income over $178,650 to $388,350, plus
•35% on taxable income over $388,350.
Given your example, you would pay 10% on the first $8,700 of taxable income, and 15% on the next $25,060 of taxable income ($33,760 less $8,700).
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