2020-2021 Federal Income Tax Brackets
Tax Rates for the Tax Years 2020 and 2021 by Filing Status
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The U.S. imposes an income tax using progressive rates. An individual's tax liability gradually increases as their income increases. There are seven marginal tax rates or brackets as of 2021: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. The income that these rates apply to adjusts every year to take inflation into account.
Marginal Tax Brackets
Ordinary income tax rates apply to most kinds of income, and they're distinguished from the capital gains tax rate that's imposed on long-term gains and qualified dividends. Your marginal tax bracket is the highest tax rate imposed on your income. Marginal tax brackets refer to the tax imposed on the next dollar earned.
This is a useful concept for tax planning because it enables people to analyze the tax impact of additional income or deductions.
Tax rates are defined by year and by filing status:
Tax Tables for Tax Year 2020 (Filed in 2021)
2020 TAX YEAR – SINGLE | ||
---|---|---|
Income Range | Income Tax Rate | Long-Term Capital Gains Rate |
$0 to $9,875 | 10% | 0% |
$9,876 to $40,125 | 12% | 15% beginning at $40,001 |
$40,126 to $85,525 | 22% | 15% |
$85,526 to $163,300 | 24% | 15% |
$163,301 to $207,350 | 32% | 15% |
$207,351 to $518,400 | 35% | 20% beginning at $441,451 |
$518,401 or more | 37% | 20% |
2020 TAX YEAR – MARRIED FILING JOINTLY | ||
---|---|---|
Income Range | Income Tax Rate | Long-Term Capital Gains Rate |
$0 to $19,750 | 10% | 0% |
$19,751 to $80,250 | 12% | 15% beginning at $80,001 |
$80,251 to $171,050 | 22% | 15% |
$171,051 to $326,600 | 24% | 15% |
$326,601 to $414,700 | 32% | 15% |
$414,701 to $622,050 | 35% | 20% beginning at $496,601 |
$622,051 or more | 37% | 20% |
2020 TAX YEAR – MARRIED FILING SEPARATELY | ||
---|---|---|
Income Range | Income Tax Rate | Long-Term Capital Gains Rate |
$0 to $9,875 | 10% | 0% |
$9,876 to $40,125 | 12% | 0% |
$40,126 to $85,525 | 22% | 15% beginning at $40,001 |
$85,526 to $163,300 | 24% | 15% |
$163,301 to $207,350 | 32% | 15% |
$207,351 to $311,025 | 35% | 20% beginning at $248,301 |
$311,026 or more | 37% | 20% |
2020 TAX YEAR – HEAD OF HOUSEHOLD | ||
---|---|---|
Income Range | Income Tax Rate | Long-Term Capital Gains Rate |
$0 to $14,100 | 10% | 0% |
$14,101 to $53,700 | 12% | 15% beginning at $53,601 |
$53,701 to $85,500 | 22% | 15% |
$85,501 to $163,300 | 24% | 15% |
$163,301 to $207,350 | 32% | 15% |
$207,351 to $518,400 | 35% | 20% beginning at $469,051 |
$518,401 or more | 37% | 20% |
These tax rates were in effect for income earned from Jan. 1 through Dec. 31, 2020.
Tax Tables for Tax Year 2021 (Filed in 2022)
2021 TAX YEAR – SINGLE | ||
---|---|---|
Income Range | Income Tax Rate | Long-Term Capital Gains Rate |
$0 to $9,950 | 10% | 0% |
$9,951 to $40,525 | 12% | 15% beginning at $40,001 |
$40,526 to $86,375 | 22% | 15% |
$86,376 to $164,925 | 24% | 15% |
$164,926 to $209,425 | 32% | 15% |
$209,426 to $523,600 | 35% | 20% beginning at $445,851 |
$523,601 or more | 37% | 20% |
2021 TAX YEAR – MARRIED FILING JOINTLY | ||
---|---|---|
Income Range | Income Tax Rate | Long-Term Capital Gains Rate |
$0 to $19,900 | 10% | 0% |
$19,901 to $81,050 | 12% | 15% |
$81,051 to $172,750 | 22% | 15% beginning at $80,801 |
$172,751 to $329,850 | 24% | 15% |
$329,851 to $418,850 | 32% | 15% |
$418,851 to $628,300 | 35% | 20% beginning at $501,601 |
$628,301 or more | 37% | 20% |
2021 TAX YEAR – MARRIED FILING SEPARATELY | ||
---|---|---|
Income Range | Income Tax Rate | Long-Term Capital Gains Rate |
$0 to $9,950 | 10% | 0% |
$9,951 to $40,525 | 12% | 15% beginning at $40,401 |
$40,526 to $86,375 | 22% | 15% |
$86,376 to $164,925 | 24% | 15% |
$164,926 to $209,425 | 32% | 15% |
$209,426 to $314,150 | 35% | 20% beginning at $250,801 |
$314,151 or more | 37% | 20% |
2021 TAX YEAR – HEAD OF HOUSEHOLD | ||
---|---|---|
Income Range | Income Tax Rate | Long-Term Capital Gains Rate |
$0 to $14,200 | 10% | 0% |
$14,201 to $54,200 | 12% | 15% beginning at $54,101 |
$54,201 to $86,350 | 22% | 15% |
$86,351 to $164,900 | 24% | 15% |
$164,901 to $209,400 | 32% | 15% |
$209,401 to $523,600 | 35% | 20% beginning at $473,751 |
$523,601 or more | 37% | 20% |
These tax rates are in effect for income earned from Jan. 1 through Dec. 31, 2021.
The "Hidden" 0% Tax Bracket
Every taxpayer is entitled to claim a standard deduction or to itemize their deductions. These deductions effectively constitute a 0% tax bracket, in the sense that there's no tax imposed on income represented by these deductible expenses. They're subtracted from gross income to arrive at the income levels referenced in the federal tax brackets cited above.
Progressive Structure of the Tax Rates
U.S. tax rates are referred to as progressive because the tax rate that applies increases incrementally as an individual's income increases. For example, someone with $1 million in income would have their income taxed at every tax bracket. Someone with $5,000 in income after deductions would be taxed only at the 10% bracket.
Progressive tax rates are different from a flat tax, where one tax rate applies to all income, and from regressive tax rates, in which tax rates decrease as income increases.
Average Tax Rates vs. Marginal Tax Rates
Marginal tax rates don't tell the full story when it comes to tax planning. An individual's average rate, referred to as the effective tax rate, should be considered because this is their total federal tax liability divided by their total income. Effective tax rates indicate what the federal government taxes on someone's income.