FEDERAL INCOME TAX BRACKETS FOR 2020
Single
Taxable Income Tax Rates
$0 - $9,875 10% of taxable income
$9,876 - $40,125 $988 plus 12% of the amount over $9,875
$40,126 - $85,525 $4617plus 22% of the amount over $40,125
$85,526 - $163,300 $14,605 plus 24% of the amount over $85,525
$163,301 - $207,350 $33,271 plus 32% of the amount over $163300
$207,351 - $518,400 $47,367 plus 35% of the amount over $207,350
$518,401 or more $156,234 plus 37% of the amount over $518,400
Married Filing Jointly or Qualifying Widow(er)
Taxable Income Tax Rate
$0 - $19,750 10% of taxable income
$19,751 - $80,250 $1,975 plus 12% of the amount over $19,750
$80,251 - $171,050 $9,235 plus 22% of the amount over $80,250
$171,051 - $326,600 $29,211 plus 24% of the amount over $171,050
$326,601 - $414,700 $66,542 plus 32% of the amount over $326,600
$414,701 - $622,050 $94,734 plus 35% of the amount over $414,700
$622,050 or more $167,306 plus 37% of the amount over $622,050
Married Filing Separately
Taxable Income Tax Rate
$0 - $9,875 10% of taxable income
$9,876 - $40,126 $988 plus 12% of the amount over $9,875
$40,127 - $85,525 $4,618 plus 22% of the amount over $40,126
$85,526 - $163,300 $14,605 plus 24% of the amount over $85,525
$163,301 - $207,350 $33,271 plus 32% of the amount over $163,300
$207,351 - $311,025 $47,367 plus 35% of the amount over $207,350
$311,026 or more $83,654 plus 37% of the amount over $311,025
Head of Household
Taxable Income Tax Rate
$0 - $14,100 10% of taxable income
$14,101 - $53,700 $1,410 plus 12% of the amount over $14,100
$53,701 - $85,500 $6,162 plus 22% of the amount over $53,700
$85,501 - $163,300 $13,158 plus 24% of the amount over $85,500
$163,301 - $207,350 $31,829 plus 32% of the amount over $163,300
$207,351 - $518,400 $45,925 plus 35% of the amount over $207,350
$518,400 or more $154,792 plus 37% of the amount over $518,400
I have been asked many times for advice on how to keep from jumping up to the next tax bracket. The understanding behind this is usually the misconception of how our progressive tax system works. What many people don't realize is that our federal income tax brackets reflect marginal rates, not a rate that is applied to your entire income. Here is a quick example based on current tax rates :
For a married couple filing jointly in 2020, the 10% bracket covers income from $0 to $19,750, from $19,751 to $80,250 the tax rate is 12%, and from $80,251 to $171,050 the tax rate is 22%.
EXAMPLE:
A married couple filing jointly with taxable income of $100,000 will be in the 22% tax bracket, but they won't pay 22% in federal income taxes on the full amount. They would pay 10% on the first $19,750 ($1,975), 12% on the next $60,500 ($7,260), and 22% on the last $19,750 ($4,345). This works out to $ 13,580.00 , an effective rate of 13.58%.
What is taxable income?
Taxable income is total income minus any adjustments equals Adjusted gross income, minus your standard deduction or itemized deduction - whichever is greater minus qualified business deduction equals your Federal taxable income.
For a married couple filing jointly in 2020, the 10% bracket covers income from $0 to $19,750, from $19,751 to $80,250 the tax rate is 12%, and from $80,251 to $171,050 the tax rate is 22%.
EXAMPLE:
A married couple filing jointly with taxable income of $100,000 will be in the 22% tax bracket, but they won't pay 22% in federal income taxes on the full amount. They would pay 10% on the first $19,750 ($1,975), 12% on the next $60,500 ($7,260), and 22% on the last $19,750 ($4,345). This works out to $ 13,580.00 , an effective rate of 13.58%.
What is taxable income?
Taxable income is total income minus any adjustments equals Adjusted gross income, minus your standard deduction or itemized deduction - whichever is greater minus qualified business deduction equals your Federal taxable income.
