So what is the Federal Tax bracket and what part of it do you fall under? Well first of all, your tax bracket is the rate you pay on the dollars you earn but it is calculated as a percentage of your income. For example in 2011 here are the tax rates and brackets that you fall into depending upon your income.

$0 – $8,500 your tax bracket is 10%
$8,500 – $34,500 your tax bracket is 15%
$34,500 – $83,600 your tax bracket is 25%
$83,000 – $174,400 your tax bracket is 28%
$174,400 – $379,150 your tax bracket is 33%
$379,150 – and anything above your tax bracket is 35%

Keep in mind your taxable income is your regular income minus any deductions, qualified dividends, exemptions and social security and medicare.

But these tax rates change every year practically which is why you need to stay on top of them so you know your paying the right amount in taxes to the government. Some politicians are even trying to do any with income tax all together and create something called a fair tax which only taxes you on your consumptions rather than your income. But that is a whole different discussion. So as for now here we are waiting to see what will happen when congress decides to make any new changes to the tax brackets for the year 2012.