Definition

1. Noun:
   • A category of taxpayers based on the amount of their income: A "tax bracket" is a range of incomes subject to a particular income tax rate. The tax system is often progressive, meaning different portions of a taxpayer's income fall into different brackets, each taxed at a specific rate.

Usage

• The term "tax bracket" is used to describe the segment of the income tax system into which a person's taxable income falls. It is a key concept for calculating income tax liability.
• Example:

Examples

• Noun:
  • Falling into a higher tax bracket does not mean all your income is taxed at that higher rate.
  • The government announced changes to the income thresholds for each tax bracket.
  • You need to know your tax bracket to estimate how much you will owe.

Advanced Usage

• "To be pushed into a higher tax bracket": To have one's income increase to a level that places it in a range taxed at a higher percentage.
  • The year-end bonus pushed her into the next tax bracket.
• "Marginal tax bracket": The tax bracket that applies to the last dollar of a taxpayer's income. This is the rate paid on an additional dollar of earnings.
  • His marginal tax bracket is 24%, so he keeps 76 cents of every extra dollar he earns.

Variants and Related Words

• Tax rate (n): The percentage at which income is taxed. A tax bracket has an associated tax rate.
  • The tax rate for the lowest bracket is 10%.
• Income tax (n): A tax levied on personal or corporate income.
• Progressive tax (n): A tax system where the tax rate increases as the taxable amount increases, creating multiple tax brackets.

Synonyms

• Income tax bracket: A more explicit term for the same concept.
• Tax band: A term used similarly, especially in some other English-speaking countries.

Related Phrases

• "Bracket creep" (n): The process by which inflation pushes income into higher tax brackets even if the taxpayer's real purchasing power hasn't increased.
  • The government indexed the brackets to inflation to prevent bracket creep.

Noun

1. a category of taxpayers based on the amount of their income