What Are the Income Tax Brackets for 2020 vs. 2019?

Tax Prep & Filing

What Are the Income Tax Brackets for 2020 vs. 2019?

The IRS unveiled the 2020 tax brackets, and it's never too early to start planning to minimize your future tax bill.

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Tax planning is all about thinking ahead. So, now that the IRS has released the new tax brackets for the 2020 tax year, you can (and should) start thinking about how to handle your 2020 finances in a tax-efficient way—even though you haven't filed your 2019 tax return yet. The 2020 tax rates themselves didn't change. They're the same as the seven tax rates in effect for the 2019 tax year: 10%, 12%, 22%, 24%, 32%, 35% and 37%. However, the tax bracket ranges were adjusted, or "indexed," to account for inflation.

See Also: 20 IRS Audit Red Flags Every Taxpayer Needs to Know

2020 Tax Brackets for Single/Married Filing Jointly

Tax Rate Taxable Income
(Single)
Taxable Income
(Married Filing Jointly)
10%Up to $9,875Up to $19,750
12%$9,876 to $40,125$19,751 to $80,250
22%$40,126 to $85,525$80,251 to $171,050
24%$85,526 to $163,300$171,051 to $326,600
32%$163,301 to $207,350$326,601 to $414,700
35%$207,351 to $518,400$414,701 to $622,050
37%Over $518,400Over $622,050

One other thing to note is that Congress recently changed the indexing method used to adjust the tax brackets for inflation. Before 2019, the standard Consumer Price Index was used to adjust the brackets. However, some economists believed that formula didn't fully account for changes in spending as prices rise. As a result, the 2017 tax reform law adopted the "chained" CPI formula that the IRS now uses.

Chained indexing generally results in lower inflation adjustments to the tax brackets each year, which in turn means you could find yourself in a higher tax bracket on your next return. Why? If your income increases faster than the rate of inflation, you eventually move up to a higher bracket. Since the IRS is using lower inflation adjustments, then the chances that your income will grow faster than the IRS's rate of inflation rise.

2020 Tax Brackets for Married Filing Separately/Head of Household

Tax Rate Taxable Income
(Married Filing Separately)
Taxable Income
(Head of Household)
10%Up to $9,875Up to $14,100
12%$9,876 to $40,125$14,101 to $53,700
22%$40,126 to $85,525$53,701 to $85,500
24%$85,526 to $163,300$85,501 to $163,300
32%$163,301 to $207,350$163,301 to $207,350
35%$207,351 to $311,025$207,351 to $518,400
37%Over $311,025Over $518,400

The federal "marriage penalty" also still exists—barely. This tax-law twist makes certain couples—typically, those whose incomes are similar—filing a joint return pay more tax than they would if they were single. It's triggered when, for any given rate, the minimum taxable income for joint filers is less than twice the amount for single filers. Before the 2017 tax reform law, this happened in the four highest tax brackets. Now, however, only the top federal tax bracket contains the marriage penalty trap. As a result, only couples with a combined taxable income over $622,050 are at risk when filing their 2020 federal tax return.

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See Also: States With a "Marriage Penalty" in Their Tax Brackets

Standard Deduction and Personal Exemptions

The standard deduction amounts are adjusted for inflation, too. For joint filers, the 2020 standard deduction is $400 more than the 2019 amount. It goes up $200 in 2020 for single filers and married taxpayers filing a separate return. For heads of households, the standard deduction jumps $300 for 2020.

2020 Standard Deduction Amounts

Filing Status Standard Deduction
Single; Married Filing Separately$12,400
Married Filing Jointly$24,800
Head of Household$18,650

As in 2019, personal exemption deductions aren't allowed for 2020. They were eliminated by the 2017 tax reform law.

By the way, it's always a good idea to check your income tax withholding each year—especially, if you're moving into a different tax bracket or experience some other significant shift in your financial situation. Look for changes to how withholding amounts are computed starting in 2020, but in the meantime we have a handy tax withholding calculator that can help you nail down your withholding for the rest of 2019. Even though the IRS is changing Form W-4 starting in 2020, if you don't submit a new W-4 after 2019, your employer will continue to use the information from your pre-2020 W-4 to calculate your withholding.

Finally, here are the tax brackets for the 2019 tax year, for comparison's sake:

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2019 Tax Brackets for Single/Married Filing Jointly

Tax Rate Taxable Income
(Single)
Taxable Income
(Married Filing Jointly)
10%Up to $9,700Up to $19,400
12%$9,701 to $39,475$19,401 to $78,950
22%$39,476 to $84,200$78,951 to $168,400
24%$84,201 to $160,725$168,401 to $321,450
32%$160,726 to $204,100$321,451 to $408,200
35%$204,101 to $510,300$408,201 to $612,350
37%Over $510,300Over $612,350

2019 Tax Brackets for Married Filing Separately/Head of Household

Tax Rate Taxable Income
(Married Filing Separately)
Taxable Income
(Head of Household)
10%Up to $9,700Up to $13,850
12%$9,701 to $39,475$13,851 to $52,850
22%$39,476 to $84,200$52,851 to $84,200
24%$84,201 to $160,725$84,201 to $160,700
32%$160,726 to $204,100$160,701 to $204,100
35%$204,101 to $306,175$204,101 to $510,300
37%Over $306,175Over $510,300

SEE ALSO: 2020 Election: Tax Plans for the Democratic Presidential Candidates