taxes

5 higher taxes for wealthy taxpayers

Taxes » Tax Filing » 5 higher taxes for wealthy taxpayers

39.6 percent top tax rate
39.6 percent top tax rate © Monkey Business Images/Shutterstock.com

39.6 percent top tax rate

Before the tax law was changed in 2012, the highest possible tax rate was 35 percent. The signing of the American Taxpayer Relief Act into law bumped the top tax rate up 4.6 percentage points.

Higher-income individuals now face a possible 39.6 percent tax on their wages, also known as ordinary income, if their earnings are greater than $400,000 for single filers; $450,000 for married couples filing a joint return; $425,000 for head of household filers; and $225,000 for those married filing separately.

The income triggers are indexed for inflation, so if economic conditions warrant an increase of the income levels, higher income earners can make a bit more money in subsequent years before facing the highest tax rate. In 2014, for example, married couples' combined income must exceed $457,600 to be taxed at the top rate.

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