What Are the 2020-2021 Federal Tax Brackets and Tax Rates?
In 2020, the deadline for filing a 2019 tax return was postponed by three months to July 15 — a nearly unprecedented move that defined the turmoil of April last year. Then, many Americans got money in stimulus relief from the CARES Act that they spent, saved or invested like income, but that wasn’t counted as income for tax purposes.
Read More: The Major Tax Changes for 2021 You Need To Know About
Needless to say, tax time is more confusing now than it’s ever been, but one thing hasn’t changed — it all starts with knowing what tax bracket you’re in. The following is a breakdown of the IRS’ 2020 and 2021 tax brackets and rates, as well as a glance at some other important changes.
See: The 6 Most Important Tax Deductions You Need to Claim
2020 Tax Bracket Thresholds and Marginal Rates
To compensate for inflation, tax rates change every year even when tax laws stay the same. Tax bracket thresholds for 2021 increased by about 1% over 2020 levels, which are listed below. To be clear, the following are the tax brackets and marginal tax rates for 2020, which apply to the tax returns that you’re required to file by April 15 of this year.
Single Filers
10%: $0-$9,875
12%: $9,875-$40,125
22%: $40,125-$85,525
24%: $85,525-$163,300
32%: $163,300-$207,350
35%: $207,350-$518,400
37%: Above $518,400
Married Couples Filing Jointly
10%: $0-$19,750
12%: $19,750-$80,250
22%: $80,250-$171,050
24%: $171,050-$326,600
32%: $326,600-$414,700
35%: $414,700-$622,050
37%: Above $622,050
Prepare Now: All the New Numbers You Need To Know for Planning Ahead on Taxes
2021 Tax Bracket Thresholds and Marginal Rates
Here’s a look at the 2021 marginal tax rates — aka tax brackets — and each bracket’s corresponding taxable income range. These are the figures you’ll consider when filing your tax returns in 2022 for the income you earn in the coming year.
Single Filers
10%: $0-$9,950
12%: $9,950-$40,525
22%: $40,525-$86,375
24%: $86,375-$164,925
32%: $164,925-$209,425
35%: $209,425-$523,600
37%: Greater than $523,600
Married Couples Filing Jointly
10%: $0-$19,900
12%: $19,900-$81,050
22%: $81,050-$172,750
24%: $172,750-$329,850
32%: $329,850-$418,850
35%: $418,850-$628,300
37%: Greater than $628,301
Did You Know: Sales Tax by State: Here’s How Much You’re Really Paying
Beyond the update to the all-important tax brackets, there are a few other things that taxpayers need to be aware of. These three are the most important:
The standard deduction for joint filers increases by $300 over 2020 levels to $25,100 in 2021. For individuals, it rises by $150 to $12,550.
As mandated by the Tax Cuts and Jobs Act, the personal exemption remains at zero and there is still no limit on itemized deductions, the same as last year for both.
The 2021 maximum Earned Income Credit will be $6,728 in 2021, up from $6,660 in 2020.
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Last updated: Feb. 12, 2021
This article originally appeared on GOBankingRates.com: What Are the 2020-2021 Federal Tax Brackets and Tax Rates?
