2020-2021 Tax Brackets and Federal Income Tax Rates

In this article, we have discussed what an income tax federal bracket is and how it works? We have also stated the income tax rates subjected to both 2018 tax brackets and 2019 tax brackets and also noted the different incomes and types subjected to it. Please note that the information in this article might not be 100% perfect and you should do research from other sources too including the federal tax official website.

Article Index:

1. 2020 Federal Income Tax Brackets

2. 2019 Federal Income Tax Brackets

3. 2018 Federal Income Tax Brackets

4. How do tax brackets work?

5. How to pay lower federal taxes?

6. How to estimate your tax bill?

 

1. 2020 Federal Income Tax Brackets:

The Internal Revenue Service has released the new federal tax rates and income tax brackets for 2020 this month. Seeing the report, one can tell that seven of the tax rates have remained unchanged compared to the 2019 income tax brackets, and the limits for income have got adjusted fro inflation. 

The tax rates or the income tax brackets in the U.S are very marginal compared to other international countries. In the U.S, the same person’s income at different levels gets taxed at different rates. For example, if you are an earning individual and possess a joint taxation system with your spouse, then you will get taxed at two different rates. 

Suppose you are earning 80,000 U.S dollars in 2020, the first 19,750 dollars will get taxed at a rate of 10%, and the remaining 19,750 will get taxed at 12%. 

The tax brackets released in 2020 will affect the taxes about to get filed in 2021. The newly released federal tax brackets depending on your filing status and taxable income for 2020 get stated below:

 

1.1 For married individuals who file income tax jointly:

1.1.110% taxation rate up to an income of 19,750 dollars.

1.1.2 12% taxation rate up to income between 19,750 to 80,250 dollars

1.1.3 22% taxation rate up to income between 80,250 t0 171,050 dollars

1.1.4 24% taxation rate up to income between 171,050 to 326,600 dollars

1.1.4 32% taxation rate up to income between 326,600 to 414,700 dollars

1.1.5 35% taxation rate up to income between 414,700 to 622,050 dollars

1.1.6 37% taxation rate for income over 622,050 dollars

 

1.2 For individuals who are still unmarried:

1.2.1 10% taxation rate up to an income of 9,875 dollars

1.2.2 12% taxation rate up to income between 9,875 to 40,125 dollars 

1.2.3 22% taxation rate upto income between 40,125 to 85,525 dollars

1.2.4 24% taxation rate upto income between 85,525 to 163,300 dollars

1.2.5 32% taxation rate upto income between 163,300 to 207,350 dollars

1.2.6 35% taxation rate upto income between 207,350 to 518,400 dollars 

1.2.6 37% taxation rate for income over 518,400 dollars

 

1.3 For heads of households:

1.3.1 10% taxation rate up to an income of 14,100 dollars

1.3.2 12% taxation rate upto income between 14,100 to 53,700 dollars 

1.3.3 22% taxation rate upto income between 53,700 to 85,500 dollars

1.3.4 24% taxation rate upto income between 85,500 to 163,300 dollars

1.3.5 32% taxation rate upto income between 163,300 to 207,350 dollars

1.3.6 35% taxation rate upto income between 207,350 to 518,400 dollars 

1.3.7 37% taxation rate for income over 518,400 dollars

 

1.4 For married individuals who file separately:

1.4.1 10% taxation rate up to an income of 9,875 dollars

1.4.2 12% taxation rate up to income between 9,875 to 40,125 dollars 

1.4.3 22% taxation rate upto income between 40,125 to 85,525 dollars

1.4.4 24% taxation rate upto income between 85,525 to 163,300 dollars

1.4.5 32% taxation rate upto income between 163,300 to 207,350 dollars

1.4.6 35% taxation rate upto income between 207,350 to 311,025 dollars 

1.4.7 37% taxation rate for income over 311,025 dollars

These are the federal tax rates and income tax brackets for 2020. And every state may house different income tax brackets and someway not have any tax brackets itself. 

 

2. 2019 Federal Income Tax Brackets:

As similar to the 2020 income tax brackets, the IRS had released seven different rates of taxation system even in 2019. Let us have a look at those rates below. The scales which got rebased in 2019 relate to the tax returns you will be filing in 2020. Every year the taxes get due in April or in October with an extension. 

2.1 For married individuals who file income tax jointly:

2.1.1 10% taxation rate up to an income of 19,400 dollars.

2.1.2 12% taxation rate up to income between 19,401 to 78,950 dollars

2.1.3 22% taxation rate up to income between 78,951 to 168,400 dollars

2.1.4 24% taxation rate up to income between 168,401 to 321,450 dollars

2.1.5 32% taxation rate up to income between 321,451 to 408,200 dollars

2.1.6 35% taxation rate up to income between 408,201 to 612,350 dollars

2.1.7 37% taxation rate for income over 612,351 dollars

 

2.2 For individuals who are still unmarried:

2.2.1 10% taxation rate up to an income of 9,700 dollars

2.2.2 12% taxation rate up to income between 9,701 to 39,475 dollars 

2.2.3 22% taxation rate upto income between 39,476 to 84,200 dollars

2.2.4 24% taxation rate upto income between 84,201 to 160,725 dollars

2.2.5 32% taxation rate upto income between 160,726 to 204,100 dollars

2.2.6 35% taxation rate upto income between 204,101 to 306,175 dollars 

2.2.7 37% taxation rate for income over 306,176 dollars

 

2.3 For heads of households:

2.3.1 10% taxation rate up to an income of 13,850 dollars

2.3.2 12% taxation rate upto income between 13,851 to 52,850 dollars 

2.3.3 22% taxation rate upto income between 52,851 to 84,200 dollars

2.3.4 24% taxation rate upto income between 84,201 to 160,700 dollars

2.3.5 32% taxation rate upto income between 160,701 to 204,100 dollars

2.3.6 35% taxation rate upto income between 204,101 to 510,300 dollars 

2.3.7 37% taxation rate for income over 510,301 dollars

 

2.4 For married individuals who file separately:

2.4.1 10% taxation rate up to an income of 9,700 dollars

2.4.2 12% taxation rate up to income between 9,701 to 39,475 dollars 

2.4.3 22% taxation rate upto income between 39,476 to 84,200 dollars

2.4.4 24% taxation rate upto income between 84,201 to 160,725 dollars

2.4.5 32% taxation rate upto income between 160,726 to 204,100 dollars

2.4.6 35% taxation rate upto income between 204,101 to 306,175 dollars 

2.4.7 37% taxation rate for income over 306,176 dollars

 

3. 2018 Federal Income Tax Brackets:

The 2018 Federal Income Tax Brackets also houses the same seven different taxation rates. For unmarried individuals, the prices will get expired in 2025 unless Congress decides on extending it. 

The bottom rate is 10%, while the top rate has fallen from 39.6% to 37% from 2017 Federal Income Tax Bracket System. Though the base rate is at 10%, it covers double the amount compared to previous bracket systems. 

 

3.1 For married individuals who file income tax jointly:

3.1.1 10% taxation rate up to an income of 19,050 dollars.

3.1.2 12% taxation rate up to income between 19,051 to 77,400 dollars

3.1.3 22% taxation rate up to income between 77,401 to 165,000 dollars

3.1.4 24% taxation rate up to income between 165,001 to 315,000 dollars

3.1.5 32% taxation rate up to income between 315,001 to 400,000 dollars

3.1.6 35% taxation rate up to income between 400,001 to 600,000 dollars

3.1.7 37% taxation rate for income over 600,000 dollars

 

3.2 For individuals who are still unmarried:

3.2.1 10% taxation rate up to an income of 9,525 dollars

3.2.2 12% taxation rate up to income between 9,526 to 38,700 dollars 

3.2.3 22% taxation rate upto income between 38,701 to 82,500 dollars

3.2.4 24% taxation rate upto income between 82,501 to 157,500 dollars

3.2.5 32% taxation rate upto income between 157,501 to 200,000 dollars

3.2.6 35% taxation rate upto income between 200,001 to 500,000 dollars 

3.2.7 37% taxation rate for income over 500,001 dollars

 

4. How do tax brackets work?

The tax system of the U.S is quite progressive compared to others as people with higher taxable get subjected to higher federal tax rates.

4.1 If you are in a tax bracket system, you aren’t paying more: The progressive tax system of the U.S shows clearly that only people with higher incomes get subjected to higher federal income tax rates. Similarly, people with lower national income get subjected to lower income tax rates. 

4.2 The Government decides how much you to have to pay it by dividing your total income into different parts: This system also gets called tax brackets. Here, each distributed piece gets its taxation rate. The best part of this system is no matter in which section you lie, you won’t get taxed for your entire income. 

4.3 The last and foremost thing is that your state may have its different bracket system or might not possess any taxation system at all. 

 

5. How to pay lower federal taxes?

There are two lucrative and efficient ways of reducing federal taxes or tax bills. They are:

5.1 Tax deductions: Tax deductions lower your taxable income or lower it by the percentage of your highest federal income tax bracket. In case you fall into the 32% tax bracket, a 1000 dollar deception will save you around 320 dollars. They help in reducing the amount of income getting subjected to your taxes.

5.2 Tax credits: Tax credits are independent of your tax brackets, which means they don’t get affected no matter which bracket you lie. They directly help in reducing the amount of taxes you have to pay to the Government

 

6. How to estimate your tax bill?

You can easily estimate your tax bill by using free income tax calculators, which provides you a complete overview of Federal Taxes. You have to enter your financial details such as Household Income, Your State or Location, and Your Filing Status. 

Once these details get entered correctly, the calculator will do the rest work and let you know your income tax bill. 

Shreyas Aravind
Shreyas Aravind
Hey, this is Shreyas A. He is an engineer by profession and an orator by passion. He loves to write on different set of topics right from technology, travel, general knowledge, science and politics. He also loves writing reviews on different product categories. He loves content writing as he belives it will help in bringing the creative person out of him 🙂

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