Personal Finance: Ask the Experts

Get advice on money matters from The Bee's Claudia Buck and a panel of local experts

January 26, 2013
What tax bracket am I in?

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
----------------- -
$42,760.00
I am opening an tax-defered Traditional IRA for 2012 $ 6000.00
------------------ -
$36,760.29
I have for the 2012 tax year medical bills of $ 3000.00
--------------- -
$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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Meet Our Financial Experts

Claudia Buck

Claudia Buck is The Sacramento Bee's personal finance columnist. Read all her columns here. Contact her at cbuck@sacbee.com

Terri Carpenter

Terri Carpenter offers advice on job hunting, retraining and career counseling. Carpenter works at Sacramento Works Inc., the career and job training arm of the Sacramento Employment and Training Agency (SETA). With 15 years in the field, she has hands-on experience with everyone from first-time job seekers to career professionals seeking advice after a layoff or looking for a mid-career change. Ask her a question.

Carlena Tapella

Carlena Tapella is a partner in the law firm of Webb & Tapella Law Corp. in Sacramento. The firm specializes in estate planning and probate, such as estates, trusts, conservatorships and litigation. She is a past president of the Sacramento County Bar Association's Estate Planning & Probate Section. Ask her a question.

Kimberly Foss

Kimberly Foss, certified financial planner, is the founder of Empyrion Wealth Management in Roseville. With nearly 30 years in the financial industry, her clients include women in transition, small business owners, retirees and "pre-retirees." Ask her a question.

Jesse Weller

Gregory Burke, a CPA and tax expert with John Waddell & Co. in Sacramento since 1984, worked as an IRS tax auditor for six years. He’s a past chairman of the California Society of CPAs. Ask him a question.

Daniel Tahara

Daniel Tahara takes your questions about California taxes. Tahara, a spokesman for the state Franchise Tax Board, has 10 years of experience as a tax auditor. Ask him a question.



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