![]() Bunching means concentrating deductions in a single year, then skipping one or even several years. Consider bunching deductions if you plan to itemize.Ensure you are using all the deductions you are eligible for. ![]() Any deductions you claim if you itemize could reduce your taxable income, which can push you into a lower tax bracket. ![]() You can potentially get into a lower tax bracket by reducing your taxable income for the year. Potential ways to get into a lower tax bracket It’s the rate you’ll pay on the amount of income that falls into the last bracket.įind the appropriate boxes listing the income thresholds for your taxable income and filing status to determine how much of your income you’ll pay in each bracket. Note: The top tax rate your income falls into is not the actual rate you’ll pay. The difference is your total taxable income. Subtract things like 401(k) contributions, HSA contributions, and health insurance premiums (all of these are already factored into your W-2, if you will receive one.) Then subtract the standard deduction, or deductions if you plan to itemize. Start by adding up all the income you’ve earned for the year that will be taxed, such as from salary, bonuses, tips, freelance income, alimony, and interest earnings. To figure out your tax bracket, first look at the rates for the filing status you plan to use: single, married filing jointly, married filing separately, or head of household. You can figure out what tax bracket you’re in using the tables published by the IRS (see tables above). How do you figure out what tax bracket you’re in?
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