What Is Total Tax?

Total tax, in the context of personal income tax, is the composite total of all taxes owed by a taxpayer for the year.

Understanding Total Tax

The total tax is progressive and based on the payer's income. Each year, the Internal Revenue Service (IRS) publishes income thresholds for seven tax brackets ranging from 10% to 37%.

The total tax number is the next-to-last step in the tax formula. It accounts for all credits and deductions due to the taxpayer but not any tax payments made during the year. Total tax is then compared with payments made to see whether a refund is due or there is a balance owed.

Total Tax Examples Under the New Tax Law

For a married couple filing jointly in 2020, the lowest total tax is 10% and applies to income up to $19,750. Thus if the couple earned $19,000, they would owe exactly $1,900 in federal income tax. A second hypothetical couple with an income over $622,050 would pay the highest percentage.

But note that the tax is graduated: the high-earning couple would owe just 10% on the first $19,750, the same as the first couple, and so on through all the brackets. The only income taxed at 37 percent would be their earnings over $622,050. As such, a couple earning $80,000 in 2020 would owe a total tax of $9,205.

 Single Taxable Income Tax Brackets and Rates, 2020

Rate Taxable Income Bracket Tax Owed
 

10%

$0 to $9,875 $988 or 10% of taxable income
 

12%

$9,876 to $40,125 $988 plus 12% of the excess over $9,875
 

22%

$40,126 to $85,525 $4,618 plus 22% of the excess over $40,125
 

24%

$85,526 to $163,300 $14,606 plus 24% of the excess over $85,525
 

32%

$163,301 to $207,350 $33,272 plus 32% of the excess over $163,300
 

35%

$207,351 to $518,400 $47,368 plus 35% of the excess over $207,350
 

37%

Over $518,400 $156,235 plus 37% of the excess over $518,400

Source: Internal Revenue Service.

Married Filing Jointly Taxable Income Tax Brackets and Rates, 2020

Rate Taxable Income Bracket Tax Owed
 

10%

$0 to $19,750 10% of taxable income
 

12%

$19,750 to $80,250 $1,975 plus 12% of the excess over $19,750
 

22%

$80,251 to $171,050 $9,235 plus 22% of the excess over $80,250
 

24%

$171,051 to $326,600 $29,211 plus 24% of the excess over $171,050
 

32%

$326,601 to $414,700 $66,543 plus 32% of the excess over $326,600
 

35%

$414,701 to $622,050 $94,735 plus 35% of the excess over $414,700
 

37%

Over $622,050 $167,308 plus 37% of the excess over $622,050

Source: Internal Revenue Service.

Example of How Deductions Affect Total Tax

Total tax includes income, the alternative minimum tax and self-employment tax. It is calculated after deductions, which with the latest tax reform have been simplified and increased somewhat for most filers.

For example, under the pre-2018 tax system, married couples filing jointly were entitled to a standard deduction of $13,850. Now they will receive a standard deduction of $24,800. That seems like a huge jump, but the government has also eliminated the individual exemption of $4,050 (or $8,100 for a couple).

With that difference, the standard deduction is effectively $16,700. That's more than previously, but not by much. Moreover, the higher standard deduction will mean fewer homeowners can claim the mortgage interest deduction and other personal deductions, which must be higher than the standard deduction to take effect.

Finally note that while the total tax is indeed total, it is hardly permanent. Many parts of the 2017 tax reform act have sunset provisions. The most important from the standpoint of middle-class taxpayers will be the expiration at the end of 2025 of most of the new deduction and exemption rules. Unless Congress acts before then, the total tax for most filers will then revert more or less to the previous levels.