Tax Prep and Tax Bracket Information

Tax Prep Tips

1. Review last year’s return in February.

This will remind you what documents you need and should be on the lookout for in the mail or in email communications.

2. Ask yourself what has changed?since last year’s filing.

3. Create a summary list of Required Documents.

Income Documents (W2’s, paystubs, bank statements)

Credit or Deduction Documents (mortgage interest statements, childcare expenses, charitable donations, moving expenses, healthcare expenses, etc.)

If you are itemizing be sure to gather supporting documents for all your deductible expenses. For a list of allowable deductions check the IRS website.

4. Create?one file location.

Keep one file either paper or electronic to organize all the tax documents. Have them stored in one easy place to access or upload to your CPA’s secure portal.

5. Plan for the?deadline.

Be sure you make time in your schedule to file online or meet with your accountant prior to the deadline!?Filing and payments are due on April 15, 2025.

For more information on filing free or extensions visit the IRS website.

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Understanding Marginal Income Tax Brackets

The tax code is lengthy and difficult to read. However, there is a wealth of information in it and it is important to understand the IRS rules. Knowing a few key concepts may provide a solid foundation. One of the key concepts is marginal income tax brackets.

Taxpayers pay the tax rate in each bracket only for that portion of their overall income that falls within that bracket’s range.

Tax is Progressive in Nature

Seeing how marginal income tax brackets work is helpful because it shows the progressive nature of income taxes. It also helps you visualize how your total tax rate can be calculated. But remember, this material is not intended as tax or legal advice. Please consult a tax professional for specific information regarding your individual situation.

Example of How Federal Income Tax Brackets Work

Say a married couple, filing jointly for the 2025 tax year, had a taxable income of $210,000. Each dollar over $206,700 – or $3,300 – would fall into the 24% federal income tax bracket. However, the couple's total federal tax would be $36,094 – about 17.2% of their adjusted gross income.

This is a hypothetical example used for illustrative purposes only. It assumes no tax credits apply.

Federal Income Tax Brackets

Your federal income tax bracket is determined by two factors: your total income and your tax-filing classification.

For the 2025 tax year, there are seven tax brackets for ordinary income – ranging from 10% to 37% – and four classifications: single, married filing jointly, married filing separately, and head of household.3

At Wealth Planning Corporation we are here to simplify your financial complexities.? If we can be of assistance this tax season, please do not hesitate to reach out.? Looking for a more in-depth financial discussion, give us a call to schedule a complimentary discovery meeting.

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Part of this material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.