Here's how to find out what tax bracket you're in for 2020 and 2021

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  • You can find your federal tax bracket by applying your taxable income and filing status to the IRS tax tables.
  • There are seven tax brackets with rates ranging from 10% to 37%; the income thresholds are updated every year for inflation.
  • Your tax bracket applies to only the amount you earn above the minimum income threshold for that bracket. It's also known as your marginal tax rate.
  • This article was reviewed for accuracy and clarity by Luis Rosa, an expert on Personal Finance Insider's tax review board.

The US operates on a progressive tax system. That means as a person earns more and progresses through tax brackets, their income-tax rate increases for each level of income.

There are seven federal income tax brackets in total, which are adjusted each year for inflation. In October, the IRS released the new income thresholds for 2021. These apply to income earned in 2021. Short-term capital gains, which apply to profits on investments, are taxed at these same rates, while long-term capital gains are taxed at preferential rates based on income and filing status: 0%, 15%, and 20%.

Tax brackets by filing status

Below are the federal income tax brackets for single filers, heads of household, and married people who file jointly and separately for 2021 and 2020.

Single:

Rate 2021 2020
10% $0 – $9,950 $0 – $9,875
12% $9,951 – $40,525 $9,876 – $40,125
22% $40,526 – $86,375 $40,126 – $85,525
24% $86,376 – $164,925 $85,526 – $163,300
32% $164,926 – $209,425 $163,301 – $207,350
35% $209,426 – $523,600 $207,351 – $518,400
37% $523,601 or more $518,401 or more

Head of household:

Rate 2021 2020
10% $0 – $14,200 $0 – $14,100
12% $14,201 – $54,200 $14,101 – $53,700
22% $54,201 – $86,350 $53,701 – $85,500
24% $86,351 – $164,900 $85,501 – $163,300
32% $164,901 – $209,400 $163,301 – $207,350
35% $209,401 – $523,600 $207,351 – $518,400
37% $523,601 or more $518,401 or more

Married filing jointly (and qualifying widow/er):

Rate 2021 2020
10% $0 – $19,900 $0 – $19,750
12% $19,901 – $81,050 $19,751 – $80,250
22% $81,051 – $172,750 $80,251 – $171,050
24% $172,751 – $329,850 $171,051 – $326,600
32% $329,851 – $418,850 $326,601 – $414,700
35% $418,851 – $628,300 $414,701 – $622,050
37% $628,301 or more $622,051 or more

Married filing separately:

Rate 2021 2020
10% $0 – $9,950 $0 – $9,875
12% $9,951 – $40,525 $9,876 – $40,125
22% $40,526 – $86,375 $40,126 – $85,525
24% $86,376 – $164,925 $85,526 – $163,300
32% $164,926 – $209,425 $163,301 – $207,350
35% $209,426 – $314,150 $207,351 to $311,025
37% $314,151 or more $311,025 or more

Standard deductions

In order to determine your taxable income, you may deduct either a standard amount from your adjusted gross income or itemized deductions, whichever is higher, but not both.

The standard deduction is also indexed each year for inflation. Here are the figures for 2021 and 2020.

Filing status 2021 2020
Single and married filing separately $12,550 $12,400
Head of household $18,800 $18,650
Married filing jointly and qualifying widow/er $25,100 $24,800

How do you know what tax bracket you're in?

How much you owe in income taxes depends on your filing status and, of course, how much you earn.

Tax brackets are based on taxable income. Taxable income is your gross income — all earnings not specifically exempt by the IRS, including unemployment compensation — reduced by any deductions you qualify for.

If your taxable income for 2020 is $50,000 as a single filer, that puts you in the 22% tax bracket, because you earn more than $40,125 but less than $85,525. This is known as your marginal tax rate.

But while 22% of $50,000 is $11,000, you're not paying $11,000 in taxes. Your tax bracket applies to only the amount you earn above the minimum income threshold for that bracket. For income below that limit, you pay the same amount of federal income taxes as everyone else, even if they earn less overall.

How the calculation works for a single taxpayer

  1. Figure out your taxable income: gross income minus deduction(s).
  2. Everyone pays a 10% federal-income tax rate on their first $9,875 of taxable income.
  3. Everyone pays a 12% federal-income tax rate on their next $9,876 to $40,125 of taxable income.
  4. Everyone pays a 22% federal-income tax rate on their next $40,126 to $85,525 of taxable income.
  5. And so on and so forth.

One notable thing about this kind of tax setup is that the amount of taxes owed by someone steadily increases as that person's amount of income increases. It's not a monumental change when people jump from one tax bracket to another.

Let's run through how this would work for an imaginary person calculating taxes for 2020: John, who earns $40,000. To keep it simple, let's say he makes all his money from his work salary, has no dependents, and no itemized deductions.

For his 2020 taxes, John would subtract the standard deduction ($12,400) and take zero personal exemptions, since they were eliminated with the GOP tax law (Tax Cuts and Jobs Act of 2017, or TCJA)

That makes his taxable income $27,600, putting him in both the 10% and 12% tax brackets.

Here's how to estimate how much he would owe in taxes:

  • The first $9,875 of his $27,600 total taxable income is taxed at a 10% rate, yielding $987.50 in taxes.
  • Then, his income between $9,875 and $27,600 — a total of $17,725 — is taxed at a 12% rate, yielding $2,127 in taxes.
  • So, adding $987.50 to $2,127, John might owe about $3,114 in taxes, rather than the $3,312 he would owe if his entire taxable income were evaluated at the 12% rate.

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