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
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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