2020 - 2021 Tax Brackets

In the United States, the IRS uses a progressive tax system that subjects income to a tax rate. The system enables income taxation according to earnings—the higher the earnings, the higher rate, and the lower the earnings the lower the rate. 

As of 2021, the tax bracket in the United States ranges from 10% to 37%. The tax bracket rate is decided based on the status and earnings of the filer. The categories of tax filers are, the single filer, married joint filer, married separate filers, and the category for household heads. 

Tax Rates and Tax Brackets

More often than not, tax rates are used interchangeably with tax brackets - but they are quite different. Tax rate means the percentage used for taxable income, while tax bracket is a combination of tax rates based on different categories of filers. 

The tax brackets get reviewed year in-year out due to inflation, and as such, the tax bracket for 2019 may differ from 2020. 

To vividly comprehend the system, here's a good example. If Jane Doe receives $38,000 taxable income, the total is not taxed directly according to the tax bracket rate. Instead, she'd pay 10% on the first $9, 875 part of the $38,000, and get taxed 12% on the rest. 

Tax Bracket Example for taxable income percentage

If Jane's salary increases to $70,000, she'd pay 10% on the $9, 875 part of the amount, 12% on 9,876 to $40,125, and 22% on 40,126 to $70,000. 

Tax bracket example for taxable incomes, tax rates

This systemic progression allows the IRS to tax in bits and not as a whole. Rather than have 22% charged on the whole $70,000, the total amount is charged in bits. 

In the years 2020 and 2021, here are the tax brackets for the single filers, married (jointly and separate), and that of house heads. 

2020 Tax Brackets

For taxes due April 2021

Single Filers

Tax Rate Taxable Income Bracket Tax Owed
10% $0 to $9,875 10% of taxable income
12% $9,876 to $40,125 $987.50 plus 12% of the amount over r $9,875 
22% $40,126 to $85,525 $4,617.50 plus 22% of the amount over $40,125
24% $85,526 to $163,300 $14,605.50 plus 24% of the amount over $85,525
32% $163,301 to $207,350 $33,271.50 plus 32% of the amount over $163,300
35% $207,351 to $518,400 $47,367.50 plus 35% of the amount over $207,350
37% $518,401 or more $156,235 including 37% of the fraction over $518, 400 

Married, Jointly Filing

Tax Rate Taxable Income Bracket Tax Owed
10% $0 to $19,750 10% of taxable income
12% $19,751 to $80,250 $1,975 plus 12% of the amount over $19,750
22% $80,251 to $171,050 $9,235 plus 22% of the amount over $80,250
24% $171,051 to $326,600 $29,211 plus 24% of the amount over $171,050
32% $326,601 to $414,700 $66,543 plus 32% of the amount over $326,600
35% $414,701 to $622,050 $94,735 plus 35% of the amount over $414,700
37% $622,051 or more $167,307.50 plus 37% of the amount over $622,050

Married, Separate Filing

Tax Rate Taxable Income Bracket Tax Owed
10% $0 to $9,875 10% of taxable income
12% $9,876 to $40,125 $987.50 plus 12% of the amount over $9,875
22% $40,126 to $85,525 $4,617.50 plus 22% of the amount over $40,125
24% $85,526 to $163,300 $14,605.50 plus 24% of the amount over $85,525
32% $163,301 to $207,350 $33,271.50 plus 32% of the amount over $163,300
35% $207,351 to $311,025 $47,367.50 plus 35% of the amount over $207,350
37% $311,026 or more $83,653.75 plus 37% of the amount over $311,025

Head of Household

Tax Rate Taxable Income Bracket Tax Owed
10% $0 to $14,100 10% of taxable income
12% $14,101 to $53,700 $1,410 plus 12% of the amount over $14,100
22% $53,701 to $85,500 $6,162 plus 22% of the amount over $53,700
24% $85,501 to $163,300 $13,158 plus 24% of the amount over $85,500
32% $163,301 to $207,350 $31,830 plus 32% of the amount over $163,300
35% $207,351 to $518,400 $45,926 plus 35% of the amount over $207,350
37% $518,401 or more $154,793.50 plus 37% of the amount over $518,400

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2021 Tax Brackets

For taxes due April 2022

Single Filers

Tax Rate Taxable Income Bracket Tax Owed
10% $0 to $9,950 10% of taxable income
12% $9,951 to $40,525 $995 plus 12% of the amount over $9,950
22% $40,526 to $86,375 $4,664 plus 22% of the amount over $40,525
24% $86,376 to $164,925 $14,751 plus 24% of the amount over $86,375
32% $164,926 to $209,425 $33,603 plus 32% of the amount over $164,925
35% $209,426 to $523,600 $47,843 plus 35% of the amount over $209,425
37% $523,601 or more $157,804.25 plus 37% of the amount over $523,600

Married, Jointly Filing

Tax Rate Taxable Income Bracket Tax Owed
10% $0 to $19,900 10% of taxable income
12% $19,901 to $81,050 $1,990 plus 12% of the amount over $19,900
22% $81,051 to $172,750 $9,328 plus 22% of the amount over $81,050
24% $172,751 to $329,850 $29,502 plus 24% of the amount over $172,750
32% $329,851 to $418,850 $67,206 plus 32% of the amount over $329,850
35% $418,851 to $628,300 $95,686 plus 35% of the amount over $418,850
37% $628,301 or more $168,993.50 plus 37% of the amount over $628,300

Married, Separate Filing

Tax Rate Taxable Income Bracket Tax Owed
10% $0 to $9,950 10% of taxable income
12% $9,951 to $40,525 $995 plus 12% of the amount over $9,950
22% $40,526 to $86,375 $4,664 plus 22% of the amount over $40,525
24% $86,376 to $164,925 $14,751 plus 24% of the amount over $86,375
32% $164,926 to $209,425 $33,603 plus 32% of the amount over $164,925
35% $209,426 to $314,150 $47,843 plus 35% of the amount over $209,425
37% $314,151 or more $84,496.75 plus 37% of the amount over $314,150
 

Head of Household

Tax Rate Taxable Income Bracket Tax Owed
10% $0 to $14,200 10% of taxable income
12% $14,201 to $54,200 $1,420 plus 12% of the amount over $14,200
22% $54,201 to $86,350 $6,220 plus 22% of the amount over $54,200
24% $86,351 to $164,900 $13,293 plus 24% of the amount over $86,350
32% $164,901 to $209,400 $32,145 plus 32% of the amount over $164,900
35% $209,401 to $523,600 $46,385 plus 35% of the amount over $209,400
37% $523,601 or more $156,355 plus 37% of the amount over $523,600

How Tax Deductions Can Help Tax Brackets

To benefit from lower tax payment by getting into a lower tax bracket, a tax deduction is an avenue to harness. Tax deductions allow an individual to pay less tax. For example, let's say Jane Doe's income falls into the 12% tax bracket, a deduction of $1000 would save her $120. 

The Benefit of Tax Brackets

The advantage of the tax bracket is balancing the income inequalities by not taxing all earners at the same rate. The manifold of workers no doubt earn differently. As such, the tax charged on individual earning is proportionate to the amount.  Higher earners pay more tax, the low earners pay less. The higher the income, the bigger the tax. Being subjected to less taxation due to income levels helps lower earners. 

Regardless of the benefits, there are opinions against this system of tax. Some believe everyone despite their income should be taxed equally. Among other points raised, the claim of the rich paying less tax and finding ways to evade taxation due to high the tax rate stands out. 

Stay abreast of information from the IRS to get updated on recent amendments to the tax brackets system. Additionally, take advantage of tax deduction to get reduced payments. 

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