tax brackets

What Are the Income Tax Brackets for 2021 vs. 2022?

For both years, there are seven different federal income tax brackets – each with its own marginal tax rate. Which bracket you end up in depends on your taxable income.

Tax Day is right around the corner – that's the last day to file your federal income tax return (unless you request a tax filing extension). For most people, Tax Day is on April 18 this year, which means you may still be working on your 2021 tax return. But smart taxpayers are also looking ahead and starting plan out their 2022 tax strategy, too. And no matter where you are right now in your tax filing and tax planning, there are some basic things you need to know – like the federal income tax rates and which tax bracket you fall (or will fall) into.

The tax rates themselves are the same for both the 2021 and 2022 tax years. There are still seven tax rates currently in effect: 10%, 12%, 22%, 24%, 32%, 35% and 37%. However, every year the tax brackets are adjusted to account for inflation. That means you could end up in a different tax bracket from one year to the next, which also means you could be subject to a different top tax rate each year even if your income remains the same.

The tax bracket ranges also differ from year to year depending on your filing status. For example, the 22% tax bracket for the 2021 tax year goes from $40,526 to $86,375 for single taxpayers, but it starts at $54,201 and ends at $86,350 for head-of-household filers. (For 2022, the 22% tax bracket for singles goes from $41,776 to $89,075, while the same rate applied to head-of-household filers with taxable income from $55,901 to $89,050.) So, that's something else to keep in mind when you're filing a return or planning to reduce a future tax bill.

Now, let's get to the actual tax brackets for 2021 and 2022. When you're working on your 2021 tax return, here are the tax brackets you'll need:

2021 Tax Brackets for Single Filers and Married Couples Filing Jointly

Tax Rate

Taxable Income
(Single)

Taxable Income
(Married Filing Jointly)

10%

Up to $9,950

Up to $19,900

12%

$9,951 to $40,525

$19,901 to $81,050

22%

$40,526 to $86,375

$81,051 to $172,750

24%

$86,376 to $164,925

$172,751 to $329,850

32%

$164,926 to $209,425

$329,851 to $418,850

35%

$209,426 to $523,600

$418,851 to $628,300

37%

Over $523,600

Over $628,300

--

2021 Tax Brackets for Married Couples Filing Separately and Head-of-Household Filers

Tax Rate

Taxable Income
(Married Filing Separately)

Taxable Income
(Head of Household)

10%

Up to $9,950

Up to $14,200

12%

$9,951 to $40,525

$14,201 to $54,200

22%

$40,526 to $86,375

$54,201 to $86,350

24%

$86,376 to $164,925

$86,351 to $164,900

32%

$164,926 to $209,425

$164,901 to $209,400

35%

$209,426 to $314,150

$209,401 to $523,600

37%

Over $314,150

Over $523,600

If you're already planning for your 2022 tax return, you'll want to look at the following tax brackets:

2022 Tax Brackets for Single Filers and Married Couples Filing Jointly

Tax Rate

Taxable Income
(Single)

Taxable Income
(Married Filing Jointly)

10%

Up to $10,275

Up to $20,550

12%

$10,276 to $41,775

$20,551 to $83,550

22%

$41,776 to $89,075

$83,551 to $178,150

24%

$89,076 to $170,050

$178,151 to $340,100

32%

$170,051 to $215,950

$340,101 to $431,900

35%

$215,951 to $539,900

$431,901 to $647,850

37%

Over $539,900

Over $647,850

--

2022 Tax Brackets for Married Couples Filing Separately and Head-of-Household Filers

Tax Rate

Taxable Income
(Married Filing Separately)

Taxable Income
(Head of Household)

10%

Up to $10,275

Up to $14,650

12%

$10,276 to $41,775

$14,651 to $55,900

22%

$41,776 to $89,075

$55,901 to $89,050

24%

$89,076 to $170,050

$89,051 to $170,050

32%

$170,051 to $215,950

$170,051 to $215,950

35%

$215,951 to $323,925

$215,951 to $539,900

37%

Over $332,925

Over $539,900

--

How the Tax Brackets Work

Suppose you're single and had $90,000 of taxable income in 2021. Since $90,000 is in the 24% bracket for singles, is your 2021 tax bill simply a flat 24% of $90,000 – or $21,600? No! Your tax is actually less than that amount. That's because, using marginal tax rates, only a portion of your income is taxed at the 24% rate. The rest of it is taxed at the 10%, 12%, and 22% rates.

Here's how it works. Again, assuming you're single with $90,000 taxable income in 2021, the first $9,950 of your income is taxed at the 10% rate for $995 of tax. The next $30,575 of income (the amount from $9,951 to $40,525) is taxed at the 12% rate for an additional $3,669 of tax. After that, the next $45,850 of your income (from $40,526 to $86,375) is taxed at the 22% rate for $10,087 of tax. That leaves only $3,625 of your taxable income (the amount over $86,375) that is taxed at the 24% rate, which comes to an additional $870 of tax. When you add it all up, your total 2021 tax is only $15,621. (That's $5,979 less than if a flat 24% rate was applied to the entire $90,000.)

Now, suppose you're a millionaire (we can all dream, right?). If you're single, only your 2021 income over $523,600 is taxed at the top rate (37%). The rest is taxed at lower rates as described above. So, for example, the tax on $1 million for a single person in 2021 is $334,072. That's a lot of money, but it's still $35,928 less than if the 37% rate were applied as a flat rate on the entire $1 million (which would result in a $370,000 tax bill).

A New Top Tax Rate for the Future?

Will the top income tax rate go up in the near future? It will if President Biden gets his way. Last year, as part of his American Families Plan, the president proposed increasing the highest tax rate from 37% to 39.6%, which is where it was before the Tax Cuts and Jobs Act of 2017. He was not able to get that change passed last year. In fact, it wasn't even included in the huge spending and relief package unsuccessfully pushed by the Biden administration in 2021 – the Build Back Better Act.

The administration's failure to pass the Build Back Better Act didn't affect the president's desire to increase the top federal income tax rate, though. Raising the top rate back to 39.6% beginning with the 2023 tax year was included once again in Biden's budget proposals release in March 2022. Under the budget plan, the 39.6% rate would apply to taxable income over $450,000 for married couples filing a joint return, $400,000 for singles, $425,000 for head-of-household filers, and $225,000 for married people filing a separate return. These thresholds would still be indexed for inflation each year after 2023 under Biden's plan.

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