Individual income tax rates (residents)

Financial years 2018–19, 2019–20^[1]

The above rates do not include the Medicare levy of 2.0%.

Assessment Year 2020

2007 & 2008

A personal tax rebate of 20% was granted for 2008, up to a maximum of $2,000.

2013

All figures are in Singapore dollars.

Tax brackets for the 2012 year of assessment

Tax brackets for the 2013 year of assessment

Income tax rates (Individual)

Financial year 2013^[9]

2018 tax brackets

As of 1 January 2018, the tax brackets have been updated due to the passage of the Tax Cuts and Jobs Act:

In the United States, the dollar amounts of the federal income tax standard deduction and personal exemptions for the taxpayer and dependents are adjusted annually to account for inflation. This results in yearly changes to the personal income tax brackets even when the federal income tax rates remain unchanged.

2011 tax brackets

Two higher tax brackets (36% and 39.6%) were added in 1993, and then taxes in all brackets were lowered in 2001 through 2003 as follows:

Internal Revenue Code terminology

Gross salary is the amount your employer pays you, plus your income tax liability. Although the tax itself is included in this figure, it is typically the one used when discussing one's pay. For example, John gets paid $50/hour as an administrative director. His annual gross salary is $50/hour x 2,000 hours/year = $100,000/year. Of this, some is paid to John, and the rest to taxes.

W-2 wages are the wages that appear on the employee's W-2 issued by his employer each year in January. A copy of the W-2 is sent to the Internal Revenue Service (IRS). It is the gross salary less any contributions to pre-tax plans. The W-2 form also shows the amount withheld by the employer for federal income tax.

W-2 wages = gross salary less (contributions to employer retirement plan) less (contributions to employer health plan) less (contributions to some other employer plans)

Total income is the sum of all taxable income, including the W-2 wages. Almost all income is taxable. There are a few exemptions for individuals such as non-taxable interest on government bonds, a portion of the Social Security (SS) income (not the payments to SS, but the payments from SS to the individual), etc.

Adjusted gross income (AGI) is Total Income less some specific allowed deductions. Such as; alimony paid (income to the recipient), permitted moving expenses, self-employed retirement program, student loan interest, etc.

Itemized deductions are other specific deductions such as; mortgage interest on a home, state income taxes or sales taxes, local property taxes, charitable contributions, state income tax withheld, etc.

Standard deduction is a sort of minimum itemized deduction. If you add up all your itemized deductions and it is less than the standard deduction you take the standard deduction. In 2007 this was $5,350 for those filing individually and $10,700 for married filing jointly.

Personal exemption is a tax exemption in which the taxpayer may deduct an amount from their gross income for each dependent they claim. It was $3,400 in 2007.

Sample tax calculation

Given the complexity of the United States' income tax code, individuals often find it necessary to consult a tax accountant or professional tax preparer. For example, John, a married 44-year-old who has two children, earned a gross salary of $100,000 in 2007. He contributes the maximum $15,500 per year to his employer's 401(k) retirement plan, pays $1,800 per year for his employer's family health plan, and $500 per year to his employer's Flexfund medical expense plan. All of the plans are allowed pre-tax contributions.

Gross pay = $100,000

W-2 wages = $100,000 – $15,500 – $1,800 – $500 = $82,200

John's and his wife's other income is $12,000 from John's wife's wages (she also got a W-2 but had no pre-tax contributions), $200 interest from a bank account, and a $150 state tax refund.

Total Income = $82,200 + $12,000 + $200 + $150 = $94,550.

John's employer reassigned John to a new office and his moving expenses were $8,000, of which $2,000 was not reimbursed by his employer.

Adjusted gross income = $94,550 – $2,000 = $92,550.

John's itemized deductions were $22,300 (mortgage interest, property taxes, and state income tax withheld).

John had four personal exemptions—himself, his wife and two children. His total personal exemptions were 4 x $3,400 = $13,600.

Taxable Income = $92,550 – $22,300 – $13,600 = $56,650.

The tax on the Taxable Income is found in a Tax Table if the Taxable Income is less than $100,000 and is computed if over $100,000. Both are used. The Tax Tables are in the 2007 1040 Instructions. The Tax Tables list income in $50 increments for all categories of taxpayers, single, married filing jointly, married filing separately, and head of household. For the Taxable Income range of "at least $56,650 but less than $56,700" the tax is $7,718 for a taxpayer who is married filing jointly.

The 2007 tax rates schedule^[12] for married filing jointly is:

The tax is 10% on the first $15,650 = $1,565.00

plus 15% of the amount over $15,650 ($56,650 – $15,650) = $41,000 x 15% = $6,150.00

Total ($1,565.00 + $6,150.00) = $7,715.00

In addition to the Federal income tax, John probably pays state income tax, Social Security tax, and Medicare tax. The Social Security tax in 2007 for John is 6.2% on the first $97,500 of earned income (wages), or a maximum of $6,045. There are no exclusions from earned income for Social Security so John pays the maximum of $6,045. His wife pays $12,000 x 6.2% = $744. Medicare is 1.45% on all earned income with no maximum. John and his wife pays $112,000 x 1.45% = $1,624 for Medicare in 2007.

Most states also levy income tax, exceptions being Alaska, Florida, Nevada, South Dakota, Texas, Washington, New Hampshire, Tennessee and Wyoming.^[13]