- March 6, 2021
With due dates approaching, tax filing is at a high peak. Before moving into tax filing, are you aware of federal income tax brackets and rates? Do you have an idea of how taxes imposed? Take a look at few details regarding tax brackets and rates.
About Tax Rates and Brackets
The US follows progressive rates for imposing an income tax. The tax liability for any individual heightens as the income rises. For 2021, there are nearly seven marginal tax rates to know. They are 10%, 12%, 22%, 24%, 32%, 35% and 37%.
As you’re gearing for filing a tax return for 2020 in 2021, there are a few variations to note. There are a few higher tax brackets. Here is an overview of the working of tax brackets.
Working of Tax Brackets
While considering the American tax system, with the taxable income amount, income taxes graduates. These are known as tax benefits. The higher individuals make, the higher the pay. For example, 10% of taxable income applies to a single taxpayer. The taxable income is $9,875 grossed in 2020. For taxable income greater than $518,400 for 2020, the tax rate is 37%. In that manner, as already discussed, there are seven tax brackets completely.
Tax brackets for income earned in 2020
- For income up to $9,875 the tax bracket is 10% ( For married couples filing tax together its $19,750)
- For income above $9,875, the tax bracket is 12% (For married couples filing tax together it’s $19,750)
- For income above $ 40,125, the tax bracket is 22% (For married couples filing tax together it’s $80,250)
- For income above $85,525, the tax bracket is 24% (For married couples filing tax together it’s $171,050)
- For income above $163,300, the tax bracket is 32% (For married couples filing tax together it’s $326,600)
- For income above $207,350, the tax bracket is 35% (For married couples filing tax together it’s $414,700)
- For income above $518,400, the tax bracket is 37% (For married couples filing tax together it’s $622,050)
The tax brackets and rates for 2021 are slightly different.
Tax brackets for 2021 income earned
- For income up to $9,950 the tax bracket is 10% ( For married couples filing tax together it’s $19,900)
- For income above $9,950, the tax bracket is 12% (For married couples filing tax together it’s $19,900)
- For income above $ 40,525, the tax bracket is 22% (For married couples filing tax together it’s $81,050)
- For income above $86,375, the tax bracket is 24% (For married couples filing tax together it’s $172,750)
- For income above $164,925, the tax bracket is 32% (For married couples filing tax together it’s $329,850)
- For income above $209,425, the tax bracket is 35% (For married couples filing tax together it’s $418,850)
- For income above $523,600, the tax bracket is 37% (For married couples filing tax together it’s $628,300)
For ones smashed by tax bill 2020, need the assistance of a tax advisor to gain reductions. A good step would be to use the tax2efile.com platform for e-filing your taxes. Know all the differences well in advance and start e-filing your tax 2020 hassle-free.
