Here’s Your New Income Tax Rate for 2021

Everything from Social Security benefits to retirement account limits are adjusted regularly to account for inflation.

The same goes for federal income tax brackets — the income ranges that determine your federal tax rate. And 2021 will be no exception: The IRS recently announced that every individual income tax bracket will increase a bit.

Following is a look at how tax brackets as well as standard deductions will change for the 2021 tax year — the one for which your tax return is due by April 2022.

Tax brackets and rates for 2021

The information in the following charts comes directly from the IRS. The income brackets (the dollar amounts) represent taxable income — meaning your income after tax deductions and credits — rather than your total income.

To determine your tax rate for 2021, find your tax-filing status (words in bold) and select the most applicable income bracket listed under your tax-filing status. To the right of that bracket is your tax rate.

Married couples filing joint tax returns

• Up to $19,900 (was $19,750 for 2020) — 10%
• More than $19,900 (was $19,750) — 12%
• More than $81,050 (was $80,250) — 22%
• More than $172,750 (was $171,050) — 24%
• More than $329,850 (was $326,600) — 32%
• More than $418,850 (was $414,700) — 35%
• More than $628,300 (was $622,050) — 37%

Surviving spouses

The brackets and rates for this tax-filing status are the same as those for married filing jointly.

Heads of household

• Up to $14,200 (was $14,100 for 2020) — 10%
• More than $14,200 (was $14,100) — 12%
• More than $54,200 (was $53,700) — 22%
• More than $86,350 (was $85,500) — 24%
• More than $164,900 (was $163,300) — 32%
• More than $209,400 (was $207,350) — 35%
• More than $523,600 (was $518,400) — 37%

Singles

• Up to $9,950 in 2021 (was $9,875 for 2020) — 10%
• More than $9,950 (was $9,875) — 12%
• More than $40,525 (was $40,125) — 22%
• More than $86,375 (was $85,525) — 24%
• More than $164,925 (was $163,300) — 32%
• More than $209,425 (was $207,350) — 35%
• More than $523,600 (was $518,400) — 37%

Married couples filing separate tax returns

• Up to $9,950 (was $9,875) — 10%
• More than $9,950 (was $9,875) — 12%
• More than $40,525 (was $40,125) — 22%
• More than $86,375 (was $85,525) — 24%
• More than $164,925 (was $163,300) — 32%
• More than $209,425 (was $207,350) — 35%
• More than $314,150 (was $311,025) — 37%

Let’s say your taxable income is $50,000 in 2021 and your tax-filing status is single, for example. You would fall into the “more than $40,525” tax bracket and your tax rate would thus be 22%.

If your taxable income is $50,000 in 2021 and your filing status is married filing jointly, you would fall into the “more than $19,900” bracket and your rate would be 12%.

Standard deductions for 2021

No one is taxed on every dollar they earn. So, not all the income you earn in 2021 will be taxed at the applicable tax rate above.

One reason for this is tax deductions, which reduce your taxable income. Most taxpayers opt to take the standard deduction, which is a flat amount, as opposed to itemizing their tax deductions.

Like tax brackets, the standard deduction gets adjusted for inflation. For the 2021 tax year, the standard deduction will be:

• $25,100 for married filing jointly or surviving spouse (an increase of $300 from the 2020 tax year)
• $18,800 for head of household (an increase of $150)
• $12,550 for single or married filing separately (an increase of $150)

This means that a married couple who file a joint tax return, for example, would not owe any taxes on the first $25,100 of their 2021 income if they choose the standard deduction for their 2021 return — assuming both individuals are younger than 65.

Taxpayers who are 65 or older generally qualify for an extra boost to their standard deductions. As we explain in “5 Tax Breaks That Retirees Often Overlook“:

“Seniors generally get an increase of $1,300 per person (if married) or $1,650 per person (if single) from the usual standard deduction.”

So, if two married seniors file a joint return, for example, their standard deduction would be $27,700 ($25,100 + $1,300 + $1,300).

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