How to Calculate a Tax Table

The United States' tax system taxes income at different percentages depending on income. To ease calculations, the Internal Revenue Service provides tax tables. These tables show the income threshold for each tax rate and their associated tax rate. By having a tax table at his or her disposal, a taxpayer is less likely to make a mathematical error when calculating taxes.

Instructions

1

Write "lower threshold" in the first column, "upper threshold" in the second column, "tax rate" in the third column and "maximum tax" in the fourth column.

2

Find the threshold limits and place each lower threshold in the "lower threshold" column and the upper threshold in the "upper threshold" column. For example, in 2012, the first threshold for the United States is 0 to $8,700 The second threshold is $8,701 to $35,350. The third threshold is $35,351 to $88,650. The fourth threshold is $85,651 to $178,650. The fifth threshold is $178,651 to $388,350. The final threshold is $388,351 and over.

3

Write the tax rate for each threshold next to the proper threshold under the "tax rate" column. U.S. tax rates are set at 10 percent, 15 percent, 25 percent, 28 percent, 33 percent and 35 percent.

4

Multiply the number in the first "upper threshold" column by the number in the first "tax rate" column and place the answer in the "maximum tax" column. For example, in the first threshold, $8,700 times 10 percent equals a maximum tax of $870.00.

5

Subtract a number in the "higher threshold" from the number in the "lower threshold," then multiply that number by the corresponding tax rate for each row. Add this number to the number in the "maximum tax" in the previous row. For example, $35,350 minus $8,700 equals $26,650, and $26,650 times 15 percent equals $3,997.50. Finally, the number in the second "maximum tax" row is $3,997.50 plus $870.00, which equals $4,867.50. Repeat these steps for each row.