What Are the Federal Income Tax Brackets and Tax Rates?
As a result of the
Tax Cuts and Jobs Act
(TCJA), the Internal
Revenue Service (IRS) changed its method of using inflation to adjust various tax provisions,
including the federal income tax brackets. Instead of the Consumer Price Index (CPI), the IRS began
using the Chained Consumer Price Index (C-CPI) starting in 2018. Subsequent federal income tax brackets
and tax rates have changed accordingly, impacting businesses and individuals of all economic
Estimate how much you’ll owe with these new tax rates by using the tax tables below.
What are the Individual Income Tax Tables?
Your federal income tax bracket and tax rates depend on your filing status.
Here’s how to use the following federal tax tables when you prepare your tax returns in 2020:
Determine your filing status to know which tax table to use.
There are five filing statuses on the federal tax return:
Then calculate your taxable income so you know which tax bracket to use.
Find the tax bracket that your taxable income falls in. For example, if you file taxes as a
single person and have $40,000 in taxable income, use the $39,475 – $84,200 bracket.
- Look to the column next to your tax bracket to identify your tax rate.
Then look to the next column to find out how much tax you’d owe. For the single filer $40,000
scenario, the tax due is $4,543 plus 22% of the amount over $39,475.
It’s a common misconception that making more money means all of your income will be taxed at a
higher rate. Instead, only the money that you earn within each higher bracket is subject to the
respective tax rate.
So, How Did Federal Income Tax Brackets and Tax Rates Change since 2017?
Generally, federal tax rates are lower.
There are still seven federal income tax brackets, but overall the rates have decreased. The new
tax rates are 10%, 12%, 22%, 24%, 32%, 35%, and 37%, depending on your tax bracket.
The highest rate has been reduced from 39.6% in 2017 to 37% in 2018.
The lowest rate is still 10%, but it now covers more income.
For instance, in 2017, the lowest tax bracket for the single filing status covered taxable income
from $0 to $9,325. In 2018, that bracket covers taxable income from $0 to $9,525, and $. This means
more of your income will be taxed at the lowest rate, which results in you paying fewer tax dollars.
These lower tax rates will expire in 2025 and revert to pre-TCJA status unless Congress votes to
extend them. Prior to the TCJA, the income tax rates were 10%, 15%, 25%, 28%, 33%, 35%, and 39.6%.
Is There Anything Else I Need to Know?
Have you gotten married, bought a house, or started a business?
If there have been any significant changes in your life, the IRS encourages you to use their Withholding Calculator for a quick
Checking your withholding can help protect against having too little tax withheld, which means you could face an
tax bill or penalty during tax season. But it’s up to you. If you’d prefer to have less tax withheld
up front and receive more in your paychecks, that’s okay, too.
If you need help, speak with your accountant or tax attorney.