2022 income tax rates and brackets Single taxpayers (1)Ģ021 income tax rates and brackets Single taxpayers (1) Taxable income (USD) 115-97 sunsets after 2025 many individual tax provisions, including the lower rates and revised brackets, in order to comply with US Senate budget rules. 115-97 reduced both the individual tax rates and the number of tax brackets. Personal income tax ratesįor individuals, the top income tax rate for 2022 is 37%, except for long-term capital gains and qualified dividends ( discussed below). Non-resident aliens are taxed on their US-source income and income effectively connected with a US trade or business (with certain exceptions). Federal taxable income is multiplied by marginal income tax rates and tax credits are subtracted from this amount to arrive at the net federal income tax (tax owed).The United States levies tax on its citizens and residents on their worldwide income. Estimated tax can be reported using Form 1040-ES and must be filed by April 15 of each year, or in quarterly installments by the 15th of April, June, September, and January.Īs illustrated below, federal taxable income is calculated as gross income (income from all sources) minus any tax deductions and exemptions for which a taxpayer might qualify. For example, dividends and interest earnings are reported on 1040 Schedule B.

Some taxpayers may be required to report other sources of income on separate forms. See the Colorado income tax checkoffs section.įederal income tax returns are due on April 15 of each year to the IRS unless an extension is filed. Money from the State Education Fund is required to be spent on “accountable education reform, for accountable programs to meet state academic standards, for class size reduction, for expanding technology education, for improving student safety, for expanding the availability of preschool through kindergarten programs, for performance incentives for teachers, for accountability reporting, or for public school building capital construction.” 18 The remaining revenue from income tax is credited to the General Fund for spending on general operations. This equates to about 7 percent of income tax revenue from both individual and corporate income taxes. One-third of one percent of state taxable income is credited to the State Education Fund pursuant to the requirements of Amendment 23. The Department of Revenue publishes information on income tax expenditures, including subtractions, deductions, and credits, in its biennial Tax Profile and Expenditure Report.

Colorado income tax credits are then subtracted from this amount to arrive at the net Colorado income tax (the amount paid by a Colorado taxpayer). To calculate the Colorado income tax, a “flat” tax rate of 4.55 percent is applied to federal taxable income after adjusting for state additions and subtractions, the largest and most common of which are listed below. Policy that changes federal taxable income will also change Colorado taxable income. Taxpayers can consult the Department of Revenue’s filing guide for instructions to complete Colorado Individual Income Tax Form 104.Ī taxpayer’s Colorado income tax liability is calculated as follows:įederal taxable income serves as the base for Colorado income tax. These forms allow taxpayers to calculate and report how much income tax has already been paid to the state of Colorado through withholding and estimated payments and how much is still due for a given tax year. Higher income earners may be required to pay the alternative minimum tax (AMT) in addition to the income tax.Ĭolorado individual income tax returns (Form 104 and any tax payment owed) for a calendar year are due to the Department of Revenue on or before the following April 15th unless an extension is granted.

Estimated tax is used to pay the alternative minimum tax and self-employment tax. These payments are filed quarterly or annually depending on the type and source of income earned. Withheld taxes are submitted by employers to the Colorado Department of Revenue.Įstimated payments include income for self-employed individuals, as well as income from dividends, interest, capital gains, rent, and royalties. For wages and salaries, the amount withheld is determined using Colorado form DR 1098. Compensation for employment and earnings from certain other income sources (including pensions, bonuses, commissions, and gambling winnings) are withheld from the employee’s paycheck by his or her employer. Individuals and some businesses pay individual income taxes through withholding or through estimated payments. Source: Colorado Revised Statutes and Legislative Council Staff.

Tax brackets 2020 federal