When it comes to designing a building, you know how to put all the right brackets in all the right places. But when it comes to your money, do you know what tax bracket you are in?
In this article, we will discuss tax brackets and a little history about the so-called progressive tax system in the United States.
The U.S. uses a progressive tax system whereby the more money a person makes in the form of income, the more money that individual pays in the form of taxes. Each bracket includes a range of incomes that represents the percentage in taxes that person should be paying. The tax brackets located at the bottom of this article are applicable for 2020 income for which a person will be filing an income tax return in April 2021.
While this article is mostly designed to inform a person of his/her tax bracket, stay tuned for more in-depth articles that include information about paying taxes on stocks, income tax credits, deductions and tax credits, effective tax rate versus marginal tax rate, and many more helpful articles to help you get your financial house in order.
Single Tax Rates:
- 10% for people earning $0 to $9,875
- 12% for people earning $9,876 to $40,125
- 22% for people earning $40,126 to $85,525
- 24% for people earning $85,526 to $163,300
- 32% for people earning $163,301 to $207,350
- 35% for people earning $207,351 to $518,400
- 37% for people earning $518,401 or more
Married, Filing Jointly
- 10% for people earning $0 to $19,750
- 12% for people earning $19,751 to $80,250
- 22% for people earning $80,251 to $171,050
- 24% for people earning $171,051 to $326,600
- 32% for people earning $326,601 to $414,700
- 35% for people earning $414,701 to $622,050
- 37% for people earning $622,051 or more
Married, Filing Separately
- 10% for people earning $0 to $9,875
- 12% for people earning $9,876 to $40,125
- 22% for people earning $40,126 to $85,525
- 24% for people earning $85,526 to $163,300
- 32% for people earning $163,301 to $207,350
- 35% for people earning $207,351 to $311,025
- 37% for people earning $311,026 or more
Head of Household
- 10% for people earning $0 to $14,100
- 12% for people earning $14,101 to $53,700
- 22% for people earning $53,701 to $85,500
- 24% for people earning $85,501 to $163,300
- 32% for people earning $163,301 to $207,350
- 35% for people earning $207,351 to $518,400
- 37% for people earning $518,401 or more
