What Are the Income Tax Brackets for 2021 vs. 2022?

This is a unique time of the year for taxpayers. On the one hand, you’re getting ready to file your 2021 tax return (which is due April 18, 2022, for most taxpayers). But, on the other hand, you’re also looking ahead (or should be) and starting to think about how to handle your 2022 finances in a tax-efficient way. In either case, you need to be familiar with the federal income tax rates and tax brackets that apply (or will apply) to you.

The tax rates themselves didn’t change from 2021 to 2022. There are still seven tax rates in effect for the 2022 tax year: 10%, 12%, 22%, 24%, 32%, 35% and 37%. However, as they are every year, the 2022 tax brackets were adjusted to account for inflation. That means you could wind up in a different tax bracket when you file your 2022 return than the bracket you were in for 2021 – which also means you could be subject to a different tax rate on some of your 2022 income, too.

Both the 2021 and 2022 tax bracket ranges also differ depending on your filing status. For example, the 22% tax bracket for the 2021 tax year goes from $40,526 to $86,375 for single taxpayers, but it starts at $54,201 and ends at $86,350 for head-of-household filers. (For 2022, the 22% tax bracket for singles goes from $41,776 to $89,075, while the same rate applied to head-of-household filers with taxable income from $55,901 to $89,050.)

When you’re working on your 2021 tax return, here are the tax brackets you’ll need:

2021 Tax Brackets for Single Filers and Married Couples Filing Jointly

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2021 Tax Brackets for Married Couples Filing Separately and Head-of-Household Filers

When you’re ready to focus on your 2022 taxes, you’ll want to use the following tax brackets:

2022 Tax Brackets for Single Filers and Married Couples Filing Jointly

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2022 Tax Brackets for Married Couples Filing Separately and Head-of-Household Filers

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How the Tax Brackets Work

Suppose you’re single and had $90,000 of taxable income in 2021. Since $90,000 is in the 24% bracket for singles, is your 2021 tax bill simply a flat 24% of $90,000 – or $21,600? No! Your tax is actually less than that amount. That’s because, using marginal tax rates, only a portion of your income is taxed at the 24% rate. The rest of it is taxed at the 10%, 12%, and 22% rates.

Here’s how it works. Again, assuming you’re single with $90,000 taxable income in 2021, the first $9,950 of your income is taxed at the 10% rate for $995 of tax. The next $30,575 of income (the amount from $9,951 to $40,525) is taxed at the 12% rate for an additional $3,669 of tax. After that, the next $45,850 of your income (from $40,526 to $86,375) is taxed at the 22% rate for $10,087 of tax. That leaves only $3,625 of your taxable income (the amount over $86,375) that is taxed at the 24% rate, which comes to an additional $870 of tax. When you add it all up, your total 2021 tax is only $15,621. (That’s $5,979 less than if a flat 24% rate was applied to the entire $90,000.)

Now, suppose you’re a millionaire (we can all dream, right?). If you’re single, only your 2021 income over $523,600 is taxed at the top rate (37%). The rest is taxed at lower rates as described above. So, for example, the tax on $1 million for a single person in 2021 is $334,072. That’s a lot of money, but it’s still $35,928 less than if the 37% rate were applied as a flat rate on the entire $1 million (which would result in a $370,000 tax bill).

The Marriage Penalty

The difference between bracket ranges sometimes creates a “marriage penalty.” This tax-law twist makes certain married couples filing a joint return pay more tax than they would if they were single (typically, where the spouses’ incomes are similar). The penalty is triggered when, for any given rate, the minimum taxable income for the joint filers’ tax bracket is less than twice the minimum amount for the single filers’ bracket.

Before the 2017 tax reform law, this happened in the four highest tax brackets. But now, as you can see in the tables above, only the top tax bracket contains the marriage penalty trap. As a result, only couples with a combined taxable income over $628,300 are at risk when filing their 2021 federal tax return. For 2022 returns, the marriage penalty is possible only for married couples with a combined taxable income above $647,850. (Note that the tax brackets for your state’s income tax could contain a marriage penalty.)