Which tax bracket are you in?

Knowing the 2019 federal income tax brackets and which one you fit into is key to being prepared for the 2020 tax season.

Get to know what the tax brackets are for 2019 and 2020, how U.S. tax brackets work and how to determine what you owe before you file your return.

What are the federal income tax brackets for 2019?

There are seven distinct U.S. income tax brackets for 2019, each with a different tax rate. The tax rates applied to your 2019 taxes are based on your taxable income and which of the four filing statuses (Single; Married, filing jointly; Married, filing separately; and Head of household) you choose to file. Each status and rate are tied to a unique range of taxable income. 

Here’s a breakdown of the seven federal tax brackets for 2019 (for returns filed by the April 2020 deadline):

10%

Single - $0 to $9,700
Married, filing jointly - $0 to $19,400
Married, filing separately - $0 to $9,700
Head of Household - $0 to $13,850

12%

Single - $9,701 to $39,475
Married, filing jointly - $19,401 to $78,950
Married, filing separately - $9,701 to $39,475
Head of Household - $13,581 to $52,850

22%

Single - $39,476 to $84,200
Married, filing jointly - $78,951 to $168,400
Married, filing separately - $39,476 to $84,200
Head of Household - $52,851 to $84,200

24%

Single - $84,201 to $160,725
Married, filing jointly - $168,401 to $321,450
Married, filing separately - $84,201 to $160,725
Head of Household - $84,201 to $160,700

32%

Single - $160,726 to $204,100
Married, filing jointly - $321,451 to $408,200
Married, filing separately - $160,726 to $204,100
Head of Household - $160,701 to $204,100

35%

Single - $201,101 to $510,300
Married, filing jointly - $408,201 to $612,350
Married, filing separately - $204,101 to $306,175
Head of Household - $204,101 to $510-300

37%

Single - $510,301+
Married, filing jointly - $612,351+
Married, filing separately - $306,176+
Head of Household - $510,301+

What are income tax brackets for 2020?

There are seven federal tax brackets in place for the 2020 income tax season. Income thresholds have increased slightly from 2019 due to inflation.

A breakdown of tax brackets and taxable income ranges for 2020 (for taxes due in 2021):

10%

Single - $0 to $9,875
Married, filing jointly - $0 to $19,750
Married, filing separately - $0 to $9,875
Head of Household - $0 to $14,100

12%

Single - $9,876 to $40,125
Married, filing jointly - $19,751 to $80,250
Married, filing separately - $9,876 to $40,125
Head of Household - $14,101 to $53,700

22%

Single - $40,126 to $85,525
Married, filing jointly - $80,251 to $171,050
Married, filing separately - $40,126 to $85,525
Head of Household - $53,701 to $85,500

24%

Single - $85,526 to $163,300
Married, filing jointly - $171,051 to $326,600
Married, filing separately - $85,526 to $163,300
Head of Household - $85,501 to $163,300

32%

Single - $163,301 to $207,350
Married, filing jointly - $326,601 to $414,700
Married, filing separately - $163,301 to $207,350
Head of Household - $163,301 to $207,350

35%

Single - $207,351 to $518,400
Married, filing jointly - $414,701 to $622,050
Married, filing separately - $207,351 to $311,025
Head of Household - $207,351 to $518,400

37%

Single - $518,401+
Married, filing jointly - $622,051+
Married, filing separately - $311,026+
Head of Household - $518,401+

How do tax brackets work?

Federal tax brackets are what the IRS uses to calculate how much you owe when you file your return. Brackets are not based on gross income, but rather your taxable income and filing status. Because the U.S. uses a graduated tax system, those with higher taxable incomes generally pay higher income tax rates.

To better understand how federal tax brackets work, it may help to think of your taxable income as segments, each of which faces a progressively higher tax rate than the last. 

Say you’re filing as ‘Single’ and claiming $50,000 in taxable income for 2019. According to the 2019 tax brackets, the first segment of your income ($9,700) is subject to one tax rate (10%), while the next ($29,774) is subject to a higher rate (12%). And all taxable income beyond that ($10,526) is taxed even higher (22%). 

So, to calculate your federal taxes in this instance, you would need to add up the amounts for all three segments:

$970
($9,700 x 10%)

+

$3,573.88
($29,774 x 12%)

+

$2,315.72
($10,526 x 22%)

=

$6,858.60

$6,858.60, which would be your total taxable income for 2019. 

Note that these income tax brackets and rates apply only to income from ordinary sources. Other types of income, such as long-term capital gains, tend to face different rates, particularly if you’re in a lower tax bracket. 

What tax bracket am I in?

To figure out which federal tax bracket you’re in, you must know two things:

1. Your filing status

As we examined earlier, you have four options when it comes to filing status (Single; Married, filing jointly; Married, filing separately; Head of household). Choosing the right status for filing your 2019 taxes depends largely on your eligibility and your unique tax situation. 

2. Your taxable income

Calculating your taxable income starts by tallying up your 2019 total gross income on your Form 1040 and Schedule 1. Once all your income is reported, you may use any deductions available on Schedule 1 to reduce your income and calculate your Adjusted Gross Income (AGI), which may then be reduced further through the standard deduction or itemized deductions. 

Reducing your taxable income is critical for lowering your tax bracket and, by extension, your tax liability. Taking advantage of available deductions and tax credits is not only legal, but highly recommended to reduce your tax burden and maximize your refund at tax time. 

How did recent tax reform affect federal tax brackets?

While the Tax Cuts and Jobs Act (TJIA) of 2017 didn’t affect the number of tax brackets under the U.S. Tax Code, it did cut income tax rates for people in the lower five brackets. TJIA also increased the standard deduction, doubled the Child Tax Credit and eliminated the tax penalty for failure to have health insurance. 

For more info on TJIA’s federal tax impact, click here

What about state and local tax brackets?

State and local governments that levy income taxes usually have their own unique tax brackets, though state and local tax rates are usually lower than those imposed by the federal government. Seven states – Texas, Wyoming, Alaska, Florida, Nevada, Washington and South Dakota – currently have no income tax, while New Hampshire and Tennessee tax only income derived from interest and dividends. 

Have questions about tax brackets?

Need some help figuring out your 2019 tax bracket? Or finding ways to lower your taxable income before the April 2020 deadline? Visit your local Liberty Tax® pro today.

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