Federal Income Tax Brackets and Rates for the 2021 Tax Year

The U.S. government taxes personal income on a progressive graduated scale—the more you earn, the higher the percentage you'll pay in taxes. Personal income tax rates begin at 10% for the tax year 2021—the return due in 2022—then gradually increase to 12%, 22%, 24%, 32%, and 35% before reaching a top rate of 37%. These tax rates are the same for 2022, but they apply to different income levels than in 2021.

Each tax rate applies to a specific range of income referred to as a “tax bracket.” Where each tax bracket begins and ends depends on your filing status. Charts below show which tax rates apply to which filing status and taxable income amount. Remember: Taxable income is what's left after you claim various deductions.

How Tax Brackets Work

The circumstances of your life determine your filing status, such as whether you're married, single, or have children or other dependents. Tax rates can also vary, depending on the type of income being taxed. Ordinary tax rates apply to most incomes, but a separate tax rate schedule applies to income derived from long-term capital gains.

It’s important to note that the bracket you fall into is not the rate applied to all of the income you earn. For example, if your taxable income is $50,000 and you’re a single filer, you fall into the 22% bracket. But that 22% rate is only applied to the amount of income you earned over the lower threshold for that tax rate and the tax year. For the tax year 2021, you'd pay 22% on income over $40,525. The 12% rate would be applied to your income that falls between $9,950 and $40,525, and the 10% rate is applied to the remainder of your income that is less than $9,950. This is how graduated tax rates work; they apply to all filers.

When you know which bracket you fall into, you can determine how much you’ll be taxed on additional income, like from a second job or side gig, until that income reaches the next bracket. This is also called your "marginal tax rate." If you’re single, and your taxable income is $50,000, your marginal rate is 22%. 

You can also use tax rates to figure out how much tax you'll save by increasing your deductions. A taxpayer in the 24% tax bracket will save $0.24 in federal tax for every $1 spent on a tax-deductible expense if they itemize.

Tax Income Brackets for Single Filers in 2021

"Single" filing status means you’re not married or were considered legally separated on the last day of the tax year.

Tax Income Brackets for Heads of Household in 2021

The head-of-household filing status applies to taxpayers who are "considered unmarried." They must have at least one dependent and pay more than half the cost of keeping up their home for the year. Married taxpayers may be able to qualify if they haven’t lived with their spouse at any time during the last six months of the year.

Tax Income Brackets for Married Taxpayers Filing Separately in 2021

This is your filing status if you're legally married, don't qualify as head of household, and don't want to file a tax return jointly with your spouse. Although the tax brackets are pretty much the same as for single filers, you'll notice that high earners take a bit of a hit when they file separately.

Tax Income Brackets for Married Taxpayers Filing Jointly in 2021

This is your status if you're married and filing a tax return with your spouse. You combine your incomes and deductions.

Each Tax Bracket Applies to a Portion of Income

As mentioned above, your marginal tax rate—the bracket that your income amount falls into—is not applied to all of your earned income.

Let's say you’re a single filer, and your taxable income is $100,000. Your marginal tax rate is 24%. You'll pay that rate only on the amount of taxable income over $86,375 ($13,625). You'll pay 22% on the income between $40,525 and $86,375 ($45,850), and 12% on income between $9,950 and $40,525 ($30,575). Finally, you’ll pay 10% on income up to $9,950 (which is $9,950). 

This tax rate chart shows how the mechanics of this work.

Using the example of $100,000 of taxable income, your total tax bill for 2021 could be calculated as follows:

• $995 + $3,669 + $10,087 + $3,270 = $18,021

So, if your taxable income is $100,000, and you’re a single filer, you would owe the IRS $18,021 before any tax deductions or tax credits. Note that while your marginal tax rate is 24% in this example, your average tax rate is actually about 18% ($18,021 / $100,000 = 0.18 = 18%).

Capital Gains Tax Rates

Long-term capital gains result from the sale of property you've held for more than one year, such as a stock portfolio, while short-term capital gains result from assets you've owned for one year or less and are taxed as ordinary income.

Long-term capital gains have their own tax brackets to determine how they are taxed. These income spans apply to your overall income, including both capital gains and ordinary income.

The long-term capital gains tax brackets for single filers for the 2021 tax year are:

The long-term capital gains tax brackets for head-of-household filers for the 2021 tax year are:

For married filers of joint returns, the capital gains tax brackets for tax year 2021 are:

Capital gains resulting from certain investments are also subject to the net investment income tax at a rate of 3.8%. This tax may apply if filers have net investment income and a modified adjusted gross income over the following threshold amounts, according to their filing status.

• Married filing jointly or qualifying widow(er) with dependent child: $250,000 or more
• Single or head of household: $200,000 or more
• Married filing separately: $125,000 or more

Social Security Tax Rates

Another tax that probably applies to your income is the Social Security tax. The Social Security tax rate is 12.4% on wages (you pay half, and your employer pays half) up to the Social Security wage base, which is $142,800 in 2021. Anything above the wage base amount is not subject to Social Security tax.

The maximum Social Security tax paid by employees is $8,853.60 for the tax year 2021, or 6.2% of $142,800. Self-employed filers pay the full 12.4%, for a maximum of $17,707.20 for tax year 2021.

This wage base is adjusted annually to keep up with inflation. For the 2022 tax year, the wage base for the Social Security tax is $147,000.

Medicare Tax Rates

The Medicare tax rate is 2.9% on wages and self-employment income. There's no wage base for this tax—all ordinary income is taxed at that rate. Employees pay half (1.45%) and employers pay the other half (1.45%). Self-employed individuals pay the whole 2.9%. 

The Additional Medicare Tax rate is 0.9% on wages and self-employment income, but it's only applicable to incomes over $200,000. Employers don’t have to match any portion of this tax.

Frequently Asked Questions (FAQs)