2020 & 2021 Tax Brackets & Standard Deductions

The IRS has released the 2021 tax brackets (a bracketed rate table for the IRS federal income tax rates) and standard deduction amounts, and there are a number of inflation adjustments over the 2020 tax brackets and standard deductions.

Since we’re still focused on 2020 for tax filing purposes, the 2020 tax brackets are going to be of most interest to you when you do your upcoming taxes, so I have included those as well. Armed with the below information, it would be an excellent time to calculate what your modified adjusted gross income will likely be next year and modify your tax withholding on your W4 form. This will help prevent being penalized for underpayment of taxes or getting a refund (which is really a form of self penalization by letting the government borrow your money, interest-free).

tax brackets

With the Tax Cut & Jobs Act (tax reform), the 2020 and 2021 tax brackets, tax rates, and standard deduction amounts have all been heavily revised from pre-reform levels. Barring further legislative changes, these brackets will continue through 2025.

2020 Tax Brackets (IRS Federal Income Tax Rates Table)

In the tables below, it is important to note that the highlighted rates represent the income tax rate owed for the portion of your taxable income that falls into that bracket. As an example, if you are single and your taxable income is $50,000, your tax tax rate on your first $9,875 of taxable income is 10%, taxable income between $9,875 and $40,125 is taxed at 12%, and income from $40,125 to $50,000 (your income) would be taxed at 22%.

Many taxpayers incorrectly assume that if your total income peaks at the 35% tax bracket, for example, then all of your income is taxed at that rate. This is not true. The United States federal income tax system is a “progressive” tax system, which means that your effective (actual) tax rate is less than the tax rate in the top bracket you are in. In other words, it is taxed in steps, or brackets. With that in mind, here are the 2020 tax brackets:

Tax RatesSingle Filer Tax BracketsMarried Filing Jointly Tax Brackets (& Surviving Spouses)Married Filing Separately Tax BracketsHead of Household Tax Brackets

2020 Standard Deductions & Dependent Exemptions

Standard deductions can lower your taxable income by allowing you to deduct from your taxable income, if you decide not to itemize taxes.

Aside from the standard deductions, there are income tax exemptions that can be claimed, whether you itemize your taxes or take the standard deduction.

standard deduction

You can claim an exemption for each dependent, but note that with tax reform the personal exemption had been completely eliminated, as of 2018. Also, note that a spouse can never be claimed as a dependent.

Here are the 2020 standard deduction and exemption amounts:

Filing Status:Deduction Amount:
Married Filing Separately$12,400
Married Filing Jointly (& Surviving Spouses)$24,800
Head of Household$18,650
Personal Exemption$0

A note of interest for those who will claim the standard deduction for 2020. There is a new universal donation deduction provision for those who do not itemize their taxes (claim the standard deduction). The 2021 maximum universal donation deduction amount was increased to $600 for “married filing jointly” and $300 for all other filers.

2021 Tax Brackets (IRS Federal Income Tax Rates Table)

Here are the new 2021 tax brackets:

Tax RatesSingle Filer Tax BracketsMarried Filing Jointly Tax Brackets (& Surviving Spouses)Married Filing Separately Tax BracketsHead of Household Tax Brackets

2021 Standard Deductions & Exemptions

And here are the 2021 standard deduction and exemption amounts:

Filing Status:Deduction Amount:
Married Filing Separately$12,550
Married Filing Jointly (& Surviving Spouses)$25,100
Head of Household$18,800
Personal Exemption$0

For more information, check out the IRS website and my “how to do your taxes” guide.

My overview of the Earned Income Tax Credit may be of interest as well.

Tax Rate Discussion

  • Which tax bracket will you top out in for this year and what are you predicting for 2020?
  • Will you be itemizing or taking the standard deduction?

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