The IRS tax brackets are probably the misunderstood part of the tax code.  Most people think that all of their income is taxed at the highest percentage that their income throws them into.  This is not true.  The income tax system in the United States is a progressive tax system. That means that different parts of your income is taxed at different rates.

One of the questions I often get is how will it affect my taxes if I take this much taxable income from a retirement account?  Or how much in taxes will it cost me if I bring in this extra income?  That is where understanding the tax tables come into play.  It all starts with your filing status, because the first thing you have to do is figure out your taxable income.