IRS releases new income tax brackets for 2021; find out where you stand

The Internal Revenue Service released its breakdown on Monday of marginal income tax rates for 2021, reflecting inflation adjustments that will be applied when filing 2021 returns in 2022.

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U.S. taxpayers fall into one of seven income tax brackets, ranging from 10% to 37%. For 2021:

• The top tax rate of 37% will apply to single filers making more than $523,600, or $628,300 for married taxpayers filing jointly.

• Single filers with income of more than $209,425, or married taxpayers filing jointly who earned more than $418,850, will be taxed at 35%.

• Single filers with income of more than $164,925, or married taxpayers filing jointly who earned more than $329,850, will be taxed at 32%.

• Single filers with income of more than $86,375, or married taxpayers filing jointly who earned more than $172,750, will be taxed at 24%.

• Single filers with income of more than $40,525, or married taxpayers filing jointly who earned more than $81,050, will be taxed at 22%.

• Single filers with income of more than $9,950, or married taxpayers filing jointly who earned more than $19,900, will be taxed at 12%.

• Anyone who earned less than the cutoff for the 12% bracket will be taxed at 10%.

Meanwhile, the IRS has also increased the standard deduction for 2021, CNBC reported.

The flat dollar amount that reduces the amount of your income that’s subject to tax will increase to $12,550 for single taxpayers and $25,100 for married couples to account for inflation, representing a $150 increase for individuals and $300 increase for married couples.

According to CNBC, heads of household will also see a $150 bump in their standard deduction to $18,800.

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