2021-2022 tax brackets and federal income tax rates

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There are seven tax brackets for most ordinary income for the 2021 tax year: 10%, 12%, 22%, 24%, 32%, 35% and 37%.

Your tax bracket depends on your taxable income and your filing status: single, married filing jointly or qualifying widow(er), married filing separately and head of household. Generally, as you move up the pay scale, you also move up the tax scale.

2021 tax brackets (taxes due April 2022 or October 2022 with an extension)
Tax rate Single Head of household Married filing jointly or qualifying widow Married filing separately
Source: IRS
10% $0 to $9,950 $0 to $14,200 $0 to $19,900 $0 to $9,950
12% $9,951 to $40,525 $14,201 to $54,200 $19,901 to $81,050 $9,951 to $40,525
22% $40,526 to $86,375 $54,201 to $86,350 $81,051 to $172,750 $40,526 to $86,375
24% $86,376 to $164,925 $86,351 to $164,900 $172,751 to $329,850 $86,376 to $164,925
32% $164,926 to $209,425 $164,901 to $209,400 $329,851 to $418,850 $164,926 to $209,425
35% $209,426 to $523,600 $209,401 to $523,600 $418,851  to $628,300 $209,426 to $314,150
37% $523,600 or more $523,600 or more $628,300 or more $314,151 or more

The IRS on Nov. 10 announced new tax brackets for the 2022 tax year, for taxes you’ll file in April 2023, or October 2023 if you file an extension. There are seven tax brackets for most ordinary income for the 2022 tax year: 10%, 12%, 22%, 24%, 32%, 35% and 37%.

2022 tax brackets (taxes due April 2023 or October 2023 with an extension)
Tax rate Single Head of household Married filing jointly or qualifying widow Married filing separately
Source: IRS
10% $0 to $10,275 $0 to $14,650 $0 to $20,550 $0 to $10,275
12% $10,276 to $41,775 $14,651 to $55,900 $20,551 to $83,550 $10,276 to $41,775
22% $41,776 to $89,075 $55,901 to $89,050 $83,551 to $178,150 $41,776 to $89,075
24% $89,076 to $170,050 $89,051 to $170,050 $178,151 to $340,100 $89,076 to $170,050
32% $170,051 to $215,950 $170,051 to $215,950 $340,101 to $431,900 $170,051 to $215,950
35% $215,951 to $539,900 $215,951 to $539,900 $431,901 to $647,850 $215,951 to $323,925
37% $539,901 or more $539,901 or more $647,851 or more $323,926 or more

How federal tax brackets work

Tax brackets are not as intuitive as they seem because most taxpayers have to look at more than one bracket to know their effective tax rate.

Instead of looking at what tax bracket you fall in based on your income, determine how many individual tax brackets you overlap based on your gross income.

Figuring that out is easier in practice:

  • Example one: Say you’re a single individual who earned $40,000 of taxable income in the 2021 tax year. Technically, you’d be aligned in the 12% tax bracket, but your income wouldn’t be levied a 12% rate across the board. Instead, you would follow the tax bracket up on the scale, paying 10% on the first $9,950 of your income and then 12% on the next chunk of your income between $9,951 and $40,525. Because you don’t make above $40,525, none of your income would be hit at the 22% rate.

That often amounts into Americans being charged a rate that’s smaller than their individual federal income tax bracket, known as their effective tax rate.

  • Example two: Say you’re a single individual in 2021 who earned $70,000 of taxable income. You would pay 10% on the first $9,950 of your earnings ($995); then 12% on the chunk of earnings from $9,951 to $40,525 ($3,669), then 22% on the remaining income ($6,484.50)
  • Your total tax bill would be $11,148.50. Divide that by your earnings of $70,000 and you get an effective tax rate of roughly 16%, which is lower than the 22% bracket you’re in.

The brackets above show the tax rates for 2021 and 2022. The brackets are adjusted each year for inflation.

Marginal tax rate definition and example

Another way of describing the U.S. tax system is by saying that most Americans are charged a marginal tax rate. That’s because as income rises, it is taxed at a higher rate. In other words, the last dollar that an American earns is taxed more than the first dollar. This is what’s known as a progressive tax system.

The technical definition of a marginal tax rate would be the rate that each individual taxpayer pays on their additional dollars of income.

How to get into a lower tax bracket

Americans have two main ways to get into a lower tax bracket: tax credits and tax deductions.

Tax credits are a dollar-for-dollar reduction in your income tax bill. If you have a $2,000 tax bill but are eligible for $500 in tax credits, your bill drops to $1,500. Tax credits can save you more in taxes than deductions, and Americans can qualify for a variety of different credits.

The federal government gives tax credits for the cost of buying solar panels for your house and to offset the cost of adopting a child. Americans can also use education tax credits, tax credits for the cost of child care and dependent care and tax credits for having children, to name a few. Many states also offer tax credits.

While tax credits reduce your actual tax bill, tax deductions reduce the amount of your income that is taxable. If you have enough deductions to exceed the standard deduction for your filing status, you can itemize those expenses to lower your taxable income. For example, if your medical expenses exceed 10% of your adjusted gross income in 2021, you can claim those and lower your taxable income.

Tax brackets from previous years

Essential tax reading

Written by
Sarah Foster
U.S. economy reporter
Sarah Foster covers the Federal Reserve, the U.S. economy and economic policy. She previously worked for Bloomberg News, the Chicago Tribune and the Chicago Daily Herald.
Edited by
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