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How Much Tax Do We Have To Pay?

How much tax you pay depends on numerous variables, the first being the status you have chosen to use for filing your tax return.If you are a single individual tax payer, then there’s a certain set of rates applicable to you as indicated below.

However, if you are married and both you and your spouse have earnings to report, then the amount of tax you pay can vary depending on whether you choose to file your return as ‘married filing jointly’ or ‘married filing separately’.

Benefits of tax credits and other deductions usually have limits when filing singly, so usually couples decide to file their taxes jointly.

Current Applicable Individual Tax Rates

The currently applicable rates (for 2008) for individual income tax are given in the table below:

Tax Rate Single Married filing jointly or Qualified Widow(er) Head of Household Married Filing Separately
10% $0 - 8,025 $0 - 16,050 $0 - $11,450 $0 - 8,025
15% $8,026- 32,550 $16,051- 65,100 $11,451- 43,650 $8,026- 32,550
25% $32,551- 78,850 $65,101- 131,450 $43,651- 112,650 $32,551- 65,725
28% $78,851- 164,550 $131,451- 200,300 $ $112,651- 182,400 $65,726- 100,150
33% $164,551- 357,700 $200,301- 357,700 $182,401- 357,700 $100,151- 178,850
35% over $357,700 over $357,700 over $357,700 over $178,850


Numerous tax calculation and return preparation software are now available and most people tend to use these to calculate their tax payable. Details of all applicable deductions and credits along with gross income and the filing status need to be input into the software which then calculates the tax payable.

April 15 is the date by which the Income Tax returns have to be filed.

The Head Of Household

To qualify as the Head of Household for filing of Income Tax Returns, it is not enough to just be the head of your household. This status has specific rules and you have to meet all the requirements to be able to file your return under this category.

You will have to have a qualifying person who is related to you, and you have to have paid more than half the cost for the upkeep of the house you and the qualifying person have lived in for more than half the year. This home should be your and your qualifying partner’s main home.

The qualifying person you have indicated should not have filed a joint federal or state return with his/her spouse or registered domestic partner and should be either a US citizen or a resident of the US, Canada or Mexico. And on the last day of the year, you must either be unmarried or not a registered domestic partner or meet the requirements for the same.

The Head of the Household filing status usually provides the benefit of a lower tax rate and a higher standard deduction than either the single or the married filing separately status.