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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.
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.
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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