Tax Rates, Exemptions, and Limitations
The 2019 Standard Deduction
The standard deduction is the portion of your income the IRS allows to be deducted from your taxable income. It ensures only people with income above these thresholds pay income tax.
- Married Filing Jointly/Surviving Spouse: $24,400
- Heads of Households: $18,350
- Single/Married Filing Separately: $12,200
There’s an additional standard deduction for people who turned 65 or older in 2019 or who are blind. It’s $1,300 for each married taxpayer or $1,650 for unmarried taxpayers.
The 2020 Standard Deduction
The Tax Cuts and Jobs Act of 2017 more than doubled the amount for standard deductions, meaning more taxpayers than ever have stopped itemizing and are claiming the standard deduction.
But it’s still good to keep track of your tax-deductible expenses in 2020 because if they happen to be higher than your standard deduction you could save some money on your taxes next year.
- Married Filing Jointly/Surviving Spouse: $24,800
- Heads of Households: $18,650
- Single/Married Filing Separately: $12,400
Remember, even if you take the standard deduction, there are still certain deductions and credits you can claim without itemizing.
How Tax Brackets Work
Currently, there are seven federal income tax brackets in the U.S ranging from 10% to 37%. These rates apply to taxable income, which is your gross income after you’ve subtracted the standard deduction or allowable itemized deductions.
2019 IRS Federal Tax Brackets
For income earned in 2019, the following are the brackets at which each segment of your applicable income are taxed:
| Tax Rate | Taxable Income (Single Filer) | Taxable Income (Married, Filing Jointly) | Taxable Income (Married, Filing Separately) |
Taxable Income (Head of Household) |
|---|---|---|---|---|
| 10% | $0 to $9,700 | $0 to $19,400 | $0 to $9,700 | $0 to $13,850 |
| 12% | $9,701 to $39,475 | $19,401 to $78,950 | $9,701 to $39,475 | $13,851 to $52,850 |
| 22% | $39,476 to $84,200 | $78,951 to $168,400 | $39,476 to $84,200 | $52,851 to $84,200 |
| 24% | $84,201 to $160,725 | $168,401 to $321,450 | $84,201 to $160,725 | $84,201 to $160,700 |
| 32% | $160,726 to $204,100 | $321,451 to $408,200 | $160,726 to $204,100 | $160,701 to $204,100 |
| 35% | $204,101 to $510,300 | $408,201 to $612,053 | $204,101 to $306,175 | $204,101 to $510,300 |
| 37% | $510,301 or more | $612,351 or more | $306,176 or more | $510,301 or more |
2020 IRS Federal Tax Brackets
For taxes due in April 2021 the income tax brackets are:
| Tax Rate | Taxable Income (Single Filer) | Taxable Income (Married, Filing Jointly) | Taxable Income (Married, Filing Separately) |
Taxable Income (Head of Household) |
|---|---|---|---|---|
| 10% | $0 to $9,875 | $0 to $19,750 | $0 to $9,875 | $0 to $14,100 |
| 12% | $9,876 to $40,125 | $19,751 to $80,250 | $9,876 to $40,125 | $14,101 to $53,700 |
| 22% | $40,126 to $85,525 | $80,251 to $171,050 | $40,126 to $85,525 | $53,701 to $85,500 |
| 24% | $85,526 to $163,300 | $171,051 to $326,600 | $85,526 to $163,300 | $85,501 to $163,300 |
| 32% | $163,301 to $207,350 | $326,601 to $414,700 | $163,301 to $207,350 | $163,301 to $207,350 |
| 35% | $207,351 to $518,400 | $414,701 to $622,050 | $207,351 to $311,025 | $207,351 to $518,400 |
| 37% | $518,401 or more | $622,051 or more | $311,026 or more | $518,401 or more |
Tax brackets divide your income into levels that are taxed at different rates. Being in one tax bracket doesn’t mean all of your income is taxed at that rate, every bracket is taxed at its own rate.
For example, let’s suppose you’re a single filer who made $21,000 in 2019. After taking the standard deduction of $12,200, your taxable income is $8,800. That puts you in just the 10% tax bracket.
Calculating Your 2019 Federal Income Tax
To calculate the amount of income tax you owe in each bracket simply multiply your income in that bracket by the applicable rate and you’ll get the amount owed. For the previous example, if your taxable income is $8,800, multiply it by .1 and you’ll see you owe $880 in federal income tax.
As you move into a higher income bracket you add a few more calculations. Say, you’re married, filing jointly with a gross income of $90,000 in 2019. After subtracting the standard deduction of $24,400 your taxable income for 2019 is $65,600. That puts you in the 12% tax bracket.
To calculate your tax bill you’ll pay 10% on the first $19,400 of your income and 12% on the remaining $46,200.
.1 x 19,400= 1,940
.12 x 46,200= 5,544
Making your total federal income tax bill $7,484. Your standard deduction is determined by your filing status and stays the same regardless of your income. As your income goes up your tax bracket rates do increase accordingly.
These are simple calculations and don’t take into account all the other deductions and credits available to taxpayers.
2019 Tax Rates
Having trouble with the math? The following tables will make calculating your taxes a little easier. Simply select your filing status, locate your taxable income after deductions, and do the math.
Table 1. Single Filers
| 2019 Taxable Income Brackets | 2019 Tax Rates |
|---|---|
| Up to $9,700 | 10% of taxable income |
| Between $9,701 and $39,475 | $970 plus 12% of income over $9,700 |
| Between $39,476 and $84,200 | $4,543 plus 22% of income over $39,475 |
| Between $84,201 and $160,725 | $14,382.50 plus 24% of income over $84,200 |
| Between $160,726 and $204,100 | $32,748.50 plus 32% of income over $160,725 |
| Between $204,100 and $510,300 | $46,628.50 plus 35% of income over $204,100 |
| $510,301 and higher | $153,798.50 plus 37% of income over $510,300 |
| 2020 Taxable Income Brackets | 2020 Tax Rates |
|---|---|
| Up to $9,875 | 10% of taxable income |
| Between $9,876 and $40,125 | $987.50 plus 12% of income over $9,875 |
| Between $40,126 and $85,525 | $4,617.50 plus 22% of income over $40,125 |
| Between $85,526 and $163,300 | $14,605.50 plus 24% of income over $85,525 |
| Between $163,301 and $207,350 | $33,271.50 plus 32% of income over $163,300 |
| Between $207,351 and $518,400 | $47,367.50 plus 35% of income over $207,350 |
| $518,401 and higher | $156,235 plus 37% of income over $518,400 |
Table 2. Married, Filing Jointly and Surviving Spouses
| 2019 Taxable Income Brackets | 2019 Tax Rates |
|---|---|
| Up to $19,400 | 10% of taxable income |
| Between $19,401 and $78,950 | $1,940 plus 12% of income over $19,400 |
| Between $78,951 and $168,400 | $9,086 plus 22% of income over $78,950 |
| Between $168,401 and $321,450 | $28,765 plus 24% of income over $168,400 |
| Between $321,451 and $408,200 | $65,497 plus 32% of income over $321,450 |
| Between $408,201 and $612,350 | $93,257 plus 35% of income over $408,200 |
| $612,351 and higher | $164,709.50 plus 37% of income over $612,350 |
| 2020 Taxable Income Brackets | 2020 Tax Rates |
|---|---|
| Up to $19,750 | 10% of taxable income |
| Between $19,751 and $80,250 | $1,975 plus 12% of income over $19,750 |
| Between $80,251 and $171,050 | $9,235 plus 22% of income over $80,250 |
| Between $171,051 and $326,600 | $29,211 plus 24% of income over $171,050 |
| Between $326,601 and $414,700 | $66,543 plus 32% of income over $326,600 |
| Between $414,701 and $622,050 | $94,735 plus 35% of income over $414,700 |
| $622,051 and higher | $167,307.50 plus 37% of income over $622,050 |
Table 3. Married, Filing Separately
| 2019 Taxable Income Brackets | 2019 Tax Rates |
|---|---|
| Up to $9,700 | 10% of taxable income |
| Between $9,701 and $39,475 | $970 plus 12% of income over $9,700 |
| Between $39,476 and $84,200 | $4,543 plus 22% of income over $39,475 |
| Between $84,201 and $160,725 | $14,382.50 plus 24% of income over $84,200 |
| Between $160,726 and $204,100 | $32,748.50 plus 32% of income over $160,725 |
| Between $204,101 and $306,175 | $46,628.50 plus 35% of income over $204,100 |
| $306,176 and higher | $82,354.75 plus 37% of income over $306,175 |
| 2020 Taxable Income Brackets | 2020 Tax Rates |
|---|---|
| Up to $9,875 | 10% of taxable income |
| Between $9,876 and $40,125 | $987.50 plus 12% of income over $9,875 |
| Between $40,126 and $85,525 | $4,617.50 plus 22% of income over $40,125 |
| Between $85,526 and $163,300 | $14,605.50 plus 24% of income over $85,525 |
| Between $163,301 and $207,350 | $33,271.50 plus 32% of income over $163,300 |
| Between $207,351 and $311,025 | $47,367.50 plus 35% of income over $207,350 |
| $311,026 and higher | $83,653.75 plus 37% of income over $311,025 |
Table 4. Heads of Households
| 2019 Taxable Income Brackets | 2019 Tax Rates |
|---|---|
| Up to $13,850 | 10% of taxable income |
| Between $13,851 and $52,850 | $1,385 plus 12% of income over $13,850 |
| Between $52,851 and $84,200 | $6,065 plus 22% of income over $52,850 |
| Over $84,201 and $160,700 | $12,962 plus 24% of income over $84,200 |
| Over $160,701 and $204,100 | $31,322 plus 32% of income over $160,700 |
| Over $204,101 and $510,300 | $45,210 plus 35% of income over $204,100 |
| $510,300 and higher | $152,380 plus 37% of income over $510,300 |
| 2020 Taxable Income Brackets | 2020 Tax Rates |
|---|---|
| Up to $14,100 | 10% of taxable income |
| Between $14,101 and $53,700 | $1,410 plus 12% of income over $14,100 |
| Between $53,701 and $85,500 | $6,162 plus 22% of income over $53,700 |
| Over $85,501 and $163,300 | $13,158 plus 24% of income over $85,500 |
| Over $163,301 and $207,350 | $31,830 plus 32% of income over $163,300 |
| Over $207,351 and $518,400 | $45,926 plus 35% of income over $207,350 |
| $518,401 and higher | $154,793.50 plus 37% of income over $518,400 |
Next Steps
An estimated 90% of tax filers will take their standard deduction. If you’re planning on having a significant number of expenses this year, keep track of them in case they exceed your standard deduction. You can still make tax-deductible contributions to your IRA for the previous tax year up until April 15th.
Also, keep track of your income throughout the year. Use these tax brackets as a goal to push your income toward the top. Alternatively, if you’re on the edge, look for ways to lower your tax liability like putting more money into a tax-advantaged retirement account or a health-savings account. Or take it as a sign that you deserve a vacation.