FEDERAL INCOME TAX BRACKETS FOR 2021
Single
Taxable Income Tax Rates
$0 - $9,950 10% of taxable income
$9,951 - $40,525 $995 plus 12% of the amount over $9,950
$40,526 - $86,375 $4,664plus 22% of the amount over $40,525
$86,376 - $164,925 $14,751 plus 24% of the amount over $86,375
$164,926 - $209,425 $33,603 plus 32% of the amount over $164,925
$209,426 - $523,600 $47,843 plus 35% of the amount over $209,425
$523,601 or more $157,804 plus 37% of the amount over $523,600
Married Filing Jointly or Qualifying Widow(er)
Taxable Income Tax Rate
$0 - $19,900 10% of taxable income
$19,901 - $81,050 $1,990 plus 12% of the amount over $19,900
$81,051 - $172,750 $9,328 plus 22% of the amount over $81,050
$172,751 - $329,850 $29,502 plus 24% of the amount over $172,750
$329,851 - $418,850 $67,206 plus 32% of the amount over $329,850
$418,851 - $628,300 $95,686 plus 35% of the amount over $418,850
$628,301 or more $168,994 plus 37% of the amount over $628,300
Married Filing Separately
Taxable Income Tax Rate
$0 - $9,950 10% of taxable income
$9,951 - $40,525 $995 plus 12% of the amount over $9,950
$40,526 - $86,375 $4,664 plus 22% of the amount over $40,525
$86,376 - $164,925 $14,751 plus 24% of the amount over $86,375
$164,926 - $209,425 $33,603 plus 32% of the amount over $164,925
$209,426 - $314,150 $47,843 plus 35% of the amount over $209,425
$314,151 or more $84,496.75 plus 37% of the amount over $314,150
Head of Household
Taxable Income Tax Rate
$0 - $14,200 10% of taxable income
$14,201 - $54,200 $1,420 plus 12% of the amount over $14,200
$54,201 - $86,350 $6,220 plus 22% of the amount over $54,200
$86,351 - $164,900 $13,293 plus 24% of the amount over $86,350
$164,901 - $209,400 $32,145 plus 32% of the amount over $164,900
$209,401 - $523,600 $46,385 plus 35% of the amount over $209,400
$523,601 or more $156,355 plus 37% of the amount over $523,600
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 2021, the 10% bracket covers income from $0 to $19,900, from $19,901 to $81,050 the tax rate is 12%, and from $81,051 to $172,750 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 $19,900 ($1,990), 12% on the next $61,150 ($7,338), and 22% on the last $18,950 ($4,169). This works out to $ 13,497.00 , an effective rate of 13.497%.
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 2021, the 10% bracket covers income from $0 to $19,900, from $19,901 to $81,050 the tax rate is 12%, and from $81,051 to $172,750 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 $19,900 ($1,990), 12% on the next $61,150 ($7,338), and 22% on the last $18,950 ($4,169). This works out to $ 13,497.00 , an effective rate of 13.497%.
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.
