Question

The Internal Revenue Code specifies the tax rates taxpayers apply to taxable income to compute their tax liability.

In what two ways are these tax rates presented for taxpayers?

 

Describe Tax Rate Schedule Method  including the number of steps to compute tax liability.

 

Describe the Tax Table Method used to compute tax liability.

 

What is the central tax form used for computation of income tax by individuals?

 

Answer 1

2020 federal income tax brackets

2020 tax brackets (for taxes due April 15, 2021)

TAX RATE	SINGLE	HEAD OF HOUSEHOLD	MARRIED FILING JOINTLY OR QUALIFYING WIDOW	MARRIED FILING SEPARATELY
Tax Schedule A tax schedule is a rate sheet used by individual or corporate taxpayers to determine their estimated taxes due. The schedule provides tax rates for given ranges of taxable income, as well as for particular taxable circumstances. The tax schedule is also called the rate schedule or tax rate schedule. How Tax Schedules Work There are four main tax schedules used by the Internal Revenue Service (IRS), based on the filing status of the individual: Schedule X - Single Schedule Y-1 - Married filing jointly, Qualifying widow(er) Schedule Y-2 - Married filing separately Schedule Z - Head of household Tax table A tax table is a chart that displays the amount of tax due based on income received. The tax rate in the table may be shown as a discrete amount, a percentage rate, or a combination of both. Tax tables are used by individuals, companies, and estates for both standard income and capital gains. IRS Tax Income tax tables for 2019 Income Tax Tables for 2019 Taxable Income Bracket Filing Status Tax Rate From USD To USD Percent Married filing jointly 0 19,400 10 19,401 78,950 12 78,951 168,400 22 168,401 321,450 24 321,451 408,200 32 408,201 612,350 35 612,351 No limit 37 Married filing separately 0 9,700 10 9,701 39,475 12 39,476 84,200 22 84,201 160,725 24 160,726 204,100 32 204,101 306,175 35 306,176 No limit 37 Head of household 0 13,850 10 13,851 52,850 12 52,851 84,200 22 84,201 160,700 24 160,701 204,100 32 204,101 510,300 35 510,301 No limit 37 Single 0 9,700 10 9,701 39,475 12 39,476 84,200 22 84,201 160,725 24 160,726 204,100 32 204,101 510,300 35 510,301 No limit 37 Filing Status Single Married Filing Jointly Married Filing Separately Head of Household 0% if taxable income is less than $39,375 $78,750 $39,375 $52,750 15% if taxable income is less than $434,550 $488,850 $244,425 $461,700 20%if taxable income is over the above amount Form for central Tax Form 1040EZ is a one-page individual tax return form for filers with no dependents and income below $100,000. Taxpayers must take the standard deduction and file as either a single taxpayer or married filing jointly taxpayer. Only the earned income credit (EIC) may be claimed as a deduction on this form Form 1040A is a two-page individual tax return for those with dependents and an income below $100,000. Allowable income sources are wages, salary, tips, capital gains, dividends, interest, unemployment compensation, pensions, annuities, Social Security, railroad retirement, taxable scholarships, and the Alaska Permanent Fund dividends. To use this form, the taxpayer must take the standard deduction. The 1040A is a simplified version of Form 1040. Individuals may file under any of the five filing statuses, single, head of household, married filing separately, married filing jointly, or widowed.
10%	$0 to $9,875	$0 to $14,100	$0 to $19,750	$0 to $9,875
12%	$9,876 to $40,125	$14,101 to $53,700	$19,751 to $80,250	$9,876 to $40,125
22%	$40,126 to $85,525	$53,701 to $85,500	$80,251 to $171,050	$40,126 to $85,525
24%	$85,526 to $163,300	$85,501 to $163,300	$171,051 to $326,600	$85,526 to $163,300
32%	$163,301 to $207,350	$163,301 to $207,350	$326,601 to $414,700	$163,301 to $207,350