|$0||$7,825||10% of the amount over $0|
|$7,825||$31,850||$782.50 plus 15% of the amount over 7,825|
|$31,850||$77,100||$4,386.25 plus 25% of the amount over 31,850|
|$77,100||$160,850||$15,698.75 plus 28% of the amount over 77,100|
|$160,850||$349,700||$39,148.75 plus 33% of the amount over 160,850|
|$349,700||no limit||$101,469.25 plus 35% of the amount over 349,700|
See IRS.gov for more information on your specific information.
My effective tax rate winds up being about 13.5%--and then there's New York State and City taxes to figure in. When I was at Starbucks, several employees realized that there was a per-week hourly limit after which it was pointless to work since we lost the extra income to taxes.
I also wondered the other day whether there is a problem with owing taxes each year as opposed to getting a refund. I aim to break even, but with my up and down side income, have had to pay for the last two years and expect to for 2007. I set money aside throughout the year in anticipation, although I do not file quarterly. As far as I can tell, as long as I pay by April 15, there's no problem at all.
I have some posts planned for the future regarding taxes as an interest-free loan (either way) and how to take advantage of what your tax dollars are buying you.