What is a tax bracket?

A tax bracket refers to the range of income levels that are taxed at a specific rate. In the progressive tax system used in the United States, individuals are taxed at different rates depending on their income level. Each bracket has its own tax rate, which increases as income rises. This means that income is taxed in segments; for example, income earned within a lower range is taxed at a lower rate, while any income that exceeds that range and falls into a higher bracket is taxed at a higher rate.

Understanding tax brackets is essential for taxpayers because it helps them estimate their tax liability and understand how their income impacts the amount of tax they pay. Tax brackets are periodically adjusted for inflation, and the rates can vary based on filing status (single, married filing jointly, head of household, etc.), further influencing the taxpayer's experience.

The other choices do not capture the essence of what a tax bracket is. The amount of tax owed relates to total tax liability, not the brackets themselves. Total income for tax purposes is a broader concept that includes all income, rather than specifying ranges. The timeline for submitting taxes pertains to deadlines rather than the structure of tax rates based on income levels.