(This will also be the case for full-time college students under age 24, unless their earned income is greater than one-half of their parents' support.)Individuals age 19 and older (and dependent full-time college students age 24 and older) pay taxes at their own rate.
Although there are no major tax law changes this year, there are still inflation adjustments and other routine changes to consider.Remember, it's important to take advantage of the tax break you're entitled to—it's not what you make but what you keep that counts.You also couldn't take a deduction for tuition and fees if you had an MAGI of ,000 or higher as a single, or 0,000 if married and filing jointly.Since the limits in these situations differ depending on your filing status, you'll need to consult a tax advisor or tally the numbers yourself to see where you stand with your MAGI.Your modified adjusted gross income (MAGI) determines your eligibility for important tax benefits, including whether you can deduct contributions to an individual retirement account (IRA), contribute to a Roth IRA, or convert a traditional IRA to a Roth IRA.
Eligibility for education tax benefits and certain income tax credits are also based on MAGI.
A top rate of 15% applies to qualified dividends and the sale of most appreciated assets held over one year (28% for collectibles and 25% for depreciation recapture) for single filers with taxable income up to 8,400 (0,700 for married filing jointly).
Long-term capital gains or qualified dividend income over that threshold are now taxed at a rate of 20%.
Also, an additional 3.8% surtax applies to net investment income for taxpayers with adjusted gross income (AGI) over 0,000 (single filers) or 0,000 (married filing jointly).
For more information on these and other changes, please see the article on inflation adjustments on the IRS website or read about Social Security cost-of-living adjustments at
Therefore, it's generally in your best interests to lower your AGI as much as possible, given your earnings.