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

What is the income tax rate for 2021 and 2022?

There are seven different federal income tax brackets for the two years - each with its own marginal tax rate. Which tier you end up in depends on your taxable income.

Tax Day is approaching - the last day to file your federal income tax return (unless you request an extension to file your tax return). For most people tax day is April 18 this year which means you may still be processing your 2021 tax return. But smart taxpayers are also looking for Get ahead and start planning their 2022 tax strategy. No matter where you are in your tax filing and tax planning right now you need to know some basic information—such as the federal income tax rate and which tax bracket you are (or will be) in.

• What's the Standard Deduction for 2022 vs. 2021?

The tax rates themselves are the same for the 2021 and 2022 tax years. There are still seven tax rates in effect: 10% 12% 22% 24% 32% 35% and 37%. However tax brackets are adjusted annually for inflation. This means you may end up in a different tax bracket than By the next year it also means that you may be subject to a different top tax rate each year even if your income remains the same.

The tax bracket ranges also vary from year to year depending on your filing status. For example the 22% tax bracket for tax year 2021 ranges from $40,526 to $86,375 for single taxpayers but starts at $54,201 for head-of-household filers and ends at $86,350. (For 2022 the 22% rate is Singles go from $41,776 to $89,075 while the same rates apply to head-of-household filers with taxable income from $55,901 to $89,050. .



Now let's look at the actual tax brackets for 2021 and 2022. Here are the tax brackets you'll need when you process your 2021 tax return:

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

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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

If you're already planning your 2022 tax return you'll need to review 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

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How the Tax Brackets Work

Say you're single and have $90,000 in taxable income in 2021. Since $90,000 is in the 24% range for singles is your 2021 tax bill just 24% of $90,000 or $21,600? Do not! Your taxes are actually lower than this amount. That's because using marginal tax rates is only part of you Income is taxed at 24%. The rest is taxed at rates of 10% 12% and 22%.

• 2022 Tax Calendar: Important Tax Due Dates and Deadlines

Here's how it works. Assuming again that you are single and your taxable income in 2021 is $90,000 the first $9,950 of your income is taxed at 10% or $995. The next $30,575 of income (amounts from $9,951 to $40,525) is taxed at 12% plus an additional $3,669 in tax. after that The next $45,850 (from $40,526 to $86,375) is taxed at 22% or $10,087. That leaves only $3,625 of taxable income (over $86,375) that is taxed at 24% an additional $870 in tax. When you add it up your 2021 tax total is only $15,621. (That's $5,979 less than applying the flat 24% tax rate on the entire $90,000.)

Now suppose you are a millionaire (can we all dream?). If you're single you're only taxed at the top rate (37%) if you earned more than $523,600 in 2021. The rest is taxed at the lower rates mentioned above. So for example a single person's $1 million tax in 2021 would be $334,072. so many But that's still $35,928 less than applying the 37% rate as a flat rate for 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 rise in the near future? If President Biden gets his way it will. Last year as part of his American Family Plan the president proposed raising the top tax rate from 37% to 39.6% the level before the 2017 Tax Cuts and Jobs Act. he can't Let last year's changes pass. In fact the massive spending and relief package the Biden administration has unsuccessfully pushed through in 2021 — the "Build Back Better Act" — isn't even included.

Still the administration's failure to pass the Build Back Better Act has not affected the president's desire to raise the top federal income tax rate. Raising the top tax rate to 39.6% starting in the 2023 tax year was again included in Biden's budget proposal released in 2019. March 2022. Under the budget plan the 39.6% rate applies to married couples filing jointly with taxable income over $450,000 — $400,000 for singles $425,000 for head-of-household filers and $225,000 for married filings alone. These thresholds will still be indexed Annual inflation after 2023 under Biden's plan.

• What Are the Capital Gains Tax Rates for 2021 vs. 2022?