Many filers don't understand their income tax brackets, which are key to effective tax planning.
Four in 10 of the surveyed participants didn't know which bracket they fell into.
"For many people, brackets are theoretical," said Liz Weston, a certified financial planner and columnist with NerdWallet. "But if you're doing something for a tax break, you'll want to know how big that tax break is."
The correct bracket — or marginal tax rate — is especially important for individuals who itemize deductions, including charitable donations and mortgage interest. A deduction will lower your taxable income based on the bracket you are in.
You should know your bracket because it will give you a sense of the true value of a deduction.
For instance, a mortgage interest deduction is a lot less attractive if you're in a low bracket.
"If you're in the 10 to 15 percent income tax bracket, then the deduction isn't really helping you out," said Weston. "At best you may get back 10 to 15 cents on the dollar for a dollar of mortgage interest paid."
Let's say that you're in the 25 percent federal income tax bracket and you're in the 8 percent tax bracket for your state.
If you took out a 30-year mortgage for $200,000 at an interest rate of 4 percent, the mortgage interest tax deduction could save you about $3,000 in the first year of your homeownership, according to Bankrate's mortgage tax deduction calculator.
Points, the prepaid interest you pay to your lender at closing, and state tax rates also affect the amount you'll save.
Here's another example of how brackets can work: If your marginal tax rate is 15 percent or below, your qualified dividends are tax free.