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IRS releases new income tax brackets for 2021
« on: October 27, 2020, 10:20:56 AM »
IRS releases new income tax brackets for 2021
These rates are in effect for 2021 and will be used to prepare your tax returns in 2022

    By Megan HenneyFOXBusiness

tion.

The IRS on Monday released the updated tax brackets for the 2021 filing season, which have been modified to reflect inflation.

Taxpayers fall into one of seven brackets: 10%, 12%, 22%, 24%, 32%, 35% and 37%. While those rates will remain unchanged in 2021, the tax brackets have been indexed to keep pace with cost-of-living adjustments.



These rates are in effect for 2021 and will be used to prepare your tax returns in 2022. You can find the tax brackets for 2020 here.

Here’s a closer look at the new rates:


Single filers

    37% for incomes over $523,600
    35% for incomes over $209,425
    32% for incomes over $164,925
    24% for incomes over $86,375
    22% for incomes over $40,525
    12% for incomes over $9,950
    10% for incomes of $9,950 or less

Married couples filing jointly

    37% for incomes over $628,300
    35% for incomes over $418,850
    32% for incomes over $329,850
    24% for incomes over $172,750
    22% for incomes over $81,050
    12% for inccomes over $19,900
    10% for incomes of $19,900 or less

Married couples filing separately

    37% for incomes over $523,600
    35% for incomes over $209,425
    32% for incomes over $164,925
    24% for incomes over $86,375
    22% for incomes over $40,525
    12% for incomes over $9,950
    10% for incomes of $9,950 or less

The IRS has also increased the standard deduction -- a flat dollar amount that reduces the amount of your income that's subject to taxes -- for 2021. For individuals and married couples filing separately, the deduction rose to $12,550, up $150 from this year. For married couples filing jointly, the deduction jumped to $25,100, an increase of $300.

Heads of households will also see an increase in their standard deduction next year: $18,800, up $150 from this year.


https://www.foxbusiness.com/economy/irs-releases-new-income-tax-brackets-for-2021
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