If you’re a business owner or working professional, filing your income tax on time should be your first priority. But with the income tax brackets 2021 undergoing a few changes, staying updated with the new regulations is crucial.
Numerous federal income tax brackets exist, and knowing about them is crucial to staying on top of your taxes. The 2020 tax year had seven federal tax brackets – 10%, 12%, 22%, 24%, 32%, 35%, and 37%. The bracket you fit in will depend on your annual taxable income and filing status.
Tax brackets 2021 are the same, but the annual taxable income bracket amount has been changed for all types of filers.
Here’s a head-to-head comparison between tax brackets 2021 and 2020.
Federal Income Tax Brackets 2020
Table of Contents
Following are the filing statuses in tax brackets 2021, along with their tax rates, annual taxable income bracket, and tax owed. Please note that on the right are the income tax brackets and on the left are the tax amount owed.
The federal government has created tax brackets for the following categories:
- Single filers
- Married or joint filers
- Married and filing separately
- Head of the household
You need to identify your category and then find your taxable income bracket to determine the tax amount owed.
Single Filers:
$0 to $9,785 – 10% of the annual taxable income.
$9,876 to $40,125 – 12% of the amount more than $9,875 and $987.50.
$40,126 to $85,525 – 24% of the amount more than $85,525 and $14,605.50
$163,301 to $207,350 – 32% of the amount more than $163,300 and $33,271.50
$207,351 to $518,400 – 35% of the amount more than $207,350 and $47,367.50
$518,401 or more – 37% of the amount more than $518,400 and $156,235
Married and/or Joint Filers
$0 to $19,750 – 10% of the annual taxable income.
$19,751 to $80,250 – 12% of the amount more than $19,750 and $1,975.
$80,251 to $171,0500 – 22% of the amount more than $80,250 and $9,235.
$171,051 to $326,600 – 24% of the amount more than $171,050 and $29,211
$326,601 to $414,700 – 32% of the amount more than $326,600 and $66,543
$414,701 to $622,050 – 35% of the amount more than $414,700 and $94,735
$414,701 to $622,050 – 37% of the amount more than $622,050 and $167,307.50.
Married/Filing Separately
$0 to $9,875 – 10% of the annual taxable income
$9,876 to $40,125 – 12% of the amount more than $9,875 and $987.50
$40,126 to $85,525 – 22% of the amount more than $40,125 and $4,617.50
$85,526 to $163,300 – 24% of the amount more than $85,525 and $14,605.50
$163,301 to $207,350 – 32% of the amount more than $163,300 and $33,271.50
$207,351 to $311,025 – 35% of the amount more than $207,350 and $47,367.50
$311,026 or more – 37% of the amount more than $311,025 and $83,653.75.
Head of Household
$0 to $14,100 – 10% of the annual taxable income
$14,101 to $53,700 – 12% of the amount more than $14,100 and $1,410
$53,701 to $85,500 – 22% of the amount more than $53,700 and $6,162
$85,501 to $163,300 – 24% of the amount more than $85,500 and $13,158
$163,301 to $207,350 – 32% of the amount more than $163,300 and $31,830
$207,351 to $518,400 – 35% of the amount more than $207,350 and $45,926
$518,401 or more – 37% of the amount more than $518,400 and $154,793.50
Federal Income Tax Brackets 2021
In 2021, there are some changes in the annual taxable income brackets, wrestling in a change in the amount of tax owed.
Here’s what has changed.
Please note that on the right are the income tax brackets 2021 and on the left is the tax amount owed.
Single Filers Tax Brackets 2021
$0 to $9,950 – 10% of the annual taxable income
$9,951 to $40,525 – 12% of the amount more than $9,950 and $9,951 to $40,525
$40,526 to $86,375 – 22% of the amount more than $40,525 and $4,664
$86,376 to $164,925 – 24% of the amount more than $86,375 and $14,751
$164,926 to $209,425 – 32% of the amount more than $164,925 and $33,603
$209,426 to $523,600 – 35% of the amount more than $209,425 and $47,843
$523,601 or more – 37% of the amount more than $523,600 and $157,804.25
Married/Joint Filers Tax Brackets 2021
$0 to $19,900 – 10% of the annual taxable income
$19,901 to $81,050 – 12% of the amount more than $19,900 and $1,990
$81,051 to $172,750 – 22% of the amount more than $81,050 and $9,328
$172,751 to $329,850 – 24% of the amount more than $172,750 and $29,502
$329,851 to $418,850 – 32% of the amount more than $329,850 and $67,206
$418,851 to $628,300 – 35% of the amount more than $418,850 and $95,686
$628,301 or more – 37% of the amount more than $628,300 and $168,993.50
Married/Filing Separately Tax Brackets 2021
$0 to $9,950 – 10% of the annual taxable income
$9,951 to $40,525 – 12% of the amount more than $9,950 and$995
$40,526 to $86,375 – 22% of the amount more than $40,525 and $4,664
$86,376 to $164,925 – 24% of the amount more than $86,375 and $14,751
$164,926 to $209,425 – 32% of the amount more than $164,925 and $33,603
$209,426 to $314,150 – 35% of the amount more than $209,425 and $47,843
$314,151 or more – 37% of the amount more than $314,150 and $84,496.75
Head of Household Tax Brackets 2021
Similarly, the head of household with a annual taxable income of:
$0 to $14,200 – 10% of the annual taxable income
$14,201 to $54,200 – 12% of the amount more than $14,200 and $1,420
$54,201 to $86,350 – 22% of the amount more than $54,200 and
$86,351 to $164,900 – 24% of the amount more than $86,350 and $13,293
$164,901 to $209,400 – 32% of the amount more than $164,900 and $32,145
$209,401 to $523,600 – 35% of the amount more than $209,400 and $46,385
$523,601 or more – 37% of the amount more than $523,600 and $523,601 or more
Wrap Up: Tax Brackets 2021 vs. 2020
If you haven’t filed your taxes already, now is the time to do so. The federal government has extended the final tax deadline to May 17, giving taxpayers more time and bandwidth to get their finances sorted and pay their taxes on time. If you’re unsure about which tax bracket you fit in and how much tax you owe, get in touch with your accountant today.
