Tax Bracket Vs. Tax Payment

• Using the numbers for single filers will keep things simple. At the low end of the bracket are taxpayers in the 10 percent range. If you make $8,500 or less, you fall in this range. At the high end is the 35 percent bracket where the minimum income is $379,150. In the middle is where most Americans fall, the 25 percent bracket, which is for income levels between $34,500 and $83,500. A full table can be found on the IRS website, but these numbers are a snapshot of the 2011 brackets.
  
  If you are concerned about tax payments, the amounts are linked to the brackets so that anyone with income between $0 and $8,500 pays 10 percent of income in tax. If you make between $34,500 and $83,500, you will pay $4,750 plus 25 percent of the amount over $34,500. If your income is $379,150 or more, you will pay $110,016 plus 35 percent of the amount that exceeds $379,150.
  
  

Deductions

• Another part of the tax code that affects how much money you will owe the government is the standard deduction, which is a fixed amount of income that can be deducted in lieu of itemizing expenses. According to the IRS, the standard deduction is normally tied to the inflation rate.
  
  In 2011, the standard deduction for single filers is $5,800, up from $5,700 in 2010. If you do itemize expenses, know that the deduction limits have also been raised to $8,500 for the highest earners.
  
  

2010 Vs. 2011

• The tax brackets changed slightly between 2010 and 2011. All of them were raised, giving taxpayers a bit of relief and perhaps helping some slide down a bracket. In 2010, the 10 percent bracket cutoff was $8,375, the 25 percent cutoff was $82,400 and the 35 percent cutoff was $373,650.
  
  Just as the standard deduction was increased by $100 for 2011, the personal exemptions available to most people were raised by about $50.
  
  

Changes Ahead

• The relatively small changes to the tax code are due in large part to the decision to extend Bush-era tax cuts for another two years. While that is down the road, most analysts are doubtful they will be extended again in 2013.