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. With the Tax Cuts and Jobs Act of 2017, the federal government authorized seven tax brackets ranging from 10 percent to 37 percent, starting in the 2018 tax year. The previous tax law also had seven brackets, but the rates and thresholds have changed.

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 2018, the lowest total tax is 10% and applies to income up to $19,050. Thus if the couple earned $19,000 they would owe exactly $1,900 in federal income tax. A second hypothetical couple with income over $600,000 would pay the highest percentage.

But note that the tax is graduated: the high-earning couple would owe just 10 percent on the first $19,050, the same as the first couple, and so on through all the brackets. The only income taxed at 37 percent would be earnings over $600,000. As such, a couple earning $80,000 in 2018 would owe a total tax of $9,479.

 Single Taxable Income Tax Brackets and Rates, 2019

Rate Taxable Income Bracket Tax Owed
 

10%

$0 to $9,700 10% of taxable income
 

12%

$9,701 to $39,475 $970 plus 12% of the excess over $9,700
 

22%

$39,476 to $84,200 $4,543 plus 22% of the excess over $39,475
 

24%

$84,201 to $160,725 $14,382.50 plus 24% of the excess over $84,200
 

32%

$160,726 to $204,100 $32,748.50 plus 32% of the excess over $160,725
 

35%

$204,101 to $510,300 $46,638.50 plus 35% of the excess over $204,100
 

37%

Over $510,300 $153,798.50 plus 37% of the excess over $510,300

Married Filing Jointly Taxable Income Tax Brackets and Rates, 2019

Rate Taxable Income Bracket Tax Owed
 

10%

$0 to $19,400 10% of taxable income
 

12%

$19,401 to $78,950 $1,940 plus 12% of the excess over $19,400
 

22%

$78,951 to $168,400 $9,086 plus 22% of the excess over $78,950
 

24%

$168,401 to $321,450 $28,765 plus 24% of the excess over $168,400
 

32%

$321,451 to $408,200 $65,497 plus 32% of the excess over $321,450
 

35%

$408,201 to $612,350 $93,257 plus 35% of the excess over $408,200
 

37%

Over $612,350 $164,709.50 plus 37% of the excess over $612,350

Real World 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 $24,400. 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 $15,900. 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.