Income Taxes
The facts you need.
Our two cents
Our two cents
Tax laws are constantly being amended. It's smart to stay on top of changes to make sure you're not only paying what you owe, but also taking advantage of all the legitimate ways to reduce your taxes. For the latest tax information, go to IRS.gov.
Not many people, except perhaps certified public accountants and IRS employees, like taxes. But we all have to pay them sooner or later, whether it's through income taxes, payroll taxes or sales taxes. The positive side of taxes is that they support everything from schools and roads to social services and law enforcement.
The more you know about taxes, the less burdensome they may seem. Here are some basic facts to help you better understand our income tax system.
Income tax brackets
The United States income tax system is progressive—meaning, the higher your income, the higher your tax rate. The rates are also different depending on whether you're a single filer or married filing jointly.
Here are the basic income tax brackets. For more details on tax brackets, see the Tax Rate Tables (PDF)
2021 Federal Income Tax Brackets
- Rate
- For Unmarried Individuals
- For Married Individuals Filing Joint Returns
- For Heads of Households
-
Rate10%For Unmarried Individuals$0 to $9,950For Married Individuals Filing Joint Returns$0 to $19,900For Heads of Households$0 to $14,200
-
Rate12%For Unmarried Individuals$9,951 to $40,525For Married Individuals Filing Joint Returns$19,901 to $81,050For Heads of Households$14,201 to $54,200
-
Rate22%For Unmarried Individuals$40,526 to $86,375For Married Individuals Filing Joint Returns$81,051 to $172,750For Heads of Households$54,201 to $86,350
-
Rate24%For Unmarried Individuals$86,376 to $164,925For Married Individuals Filing Joint Returns$172,751 to $329,850For Heads of Households$86,351 to $164,900
-
Rate32%For Unmarried Individuals$164,926 to $209,425For Married Individuals Filing Joint Returns$329,851 to $418,850For Heads of Households$164,901 to $209,400
-
Rate35%For Unmarried Individuals$209,426 to $523,600For Married Individuals Filing Joint Returns$418,851 to $628,300For Heads of Households$209,401 to $523,600
-
Rate37%For Unmarried Individuals$523,601 or moreFor Married Individuals Filing Joint Returns$628,301 or moreFor Heads of Households$523,601 or more
Source: Internal Revenue Service (0221-11NM)
Ways to reduce your tax bill
Your taxable income is usually lower than your actual income. That's because there are certain ways to lower your tax bill through deductions, exemptions and credits, including:
- Making a contribution to your retirement account
- Making a charitable contribution
- Getting a credit for dependent care
- Qualifying for the earned income tax credit
Learn about various deductions and credits and how to calculate your tax due. Please note that the ability to claim any given tax deduction or tax credit varies depending on a range of factors including your age, income and filing status. Need help? Talk with a tax advisor who can help you with specific advice for your situation.
Who needs to file a federal income tax return?
Not everyone is required to file a tax return. But even if your income falls below the filing requirement, you could benefit from filing a return. Every year, many low-income people forfeit tax refunds simply because they didn't file a return. To quickly find out if your income is below the filing requirement, go to the IRS withholding calculator
Lower your tax bill with a little help from your 401(k).
Lower your tax bill with a little help from your 401(k).Reduce your tax bill by putting aside money in your 401(k). And if your employer offers a matching contribution, contribute at least enough to get the full match. Otherwise, you're basically turning down free money.
Keep learning
Keep learningDon't just invest—invest the smart way. Utilize tax-advantaged accounts, like an IRA, and discover other methods for making your money go further.