Reminder: Tax Brackets Are Marginal
The IRS divides income into different tax rates. Each subsequent portion of your income will have an increased tax rate. For example, if you are a single filer who made $40,125 in 2021, your first $10,275 will be taxed at 10 percent. The next portion of your income will be taxed at an increased rate; from $10,276 to $41,775, your tax rate will be 12 percent.
As your income increases, you’ll fall into higher tax brackets and will have a higher tax rate for each portion of your income.
Why Would My Tax Bracket Be Different?
The IRS regularly adjusts tax brackets to take inflation into consideration. This is because, with inflation, people will face higher prices, meaning the purchasing power of their dollar is decreased. Knowing this, the IRS adjusts brackets in order to avoid bracket creep, a circumstance that occurs when inflation pushes your income into a higher tax bracket, or credits and deductions are reduced. In this scenario, an individual may not actually have increased purchasing power or greater disposable income, even with an increase in wages and salaries.(1)
2021 Tax Brackets
Without further ado, here are the 2022 tax brackets according to your filing status and income from the IRS.(1)
10% Tax Rate
Single Individuals: from $0 to $10,275
Married Individuals Filing Jointly: from $0 to $20,550
Heads of Households: from $0 to $14,650
Married Individuals Filing Separately: from $0 to $10,275
12% Tax Rate
Single Individuals: from $10,276 to $41,775
Married Individuals Filing Jointly: from $20,551 to $83,550
Heads of Households: from $14,651 to $55,900
Married Individuals Filing Separately: from $10,276 to $41,775
22% Tax Rate
Single Individuals: from $41,776 to $89,075
Married Individuals Filing Jointly: from $83,551 to $178,150
Heads of Households: from $55,901 to $89,050
Married Individuals Filing Separately: from $41,776 to $89,075
24% Tax Rate
Single Individuals: from $89,076 to $170,050
Married Individuals Filing Jointly: from $178,151 to $340,100
Heads of Households: from $89,051 to $170,050
Married Individuals Filing Separately: from $89,076 to $170,050
32% Tax Rate
Single Individuals: from $170,051 to $215,950
Married Individuals Filing Jointly: from $340,101 to $431,900
Heads of Households: from $170,051 to $215,950
Married Individuals Filing Separately: from $170,051 to $215,950
35% Tax Rate
Single Individuals: $215,951 to $539,900
Married Individuals Filing Jointly: from $431,901 to $647,850
Heads of Households: from $215,951 to $539,900
Married Individuals Filing Separately: from $215,951 to $323,925
37% Tax Rate
Single Individuals: over $539,901
Married Individuals Filing Jointly: over $647,851
Heads of Households: over $539,901
Married Individuals Filing Separately: over $323,926
In addition to the tax inflation adjustments, the IRS also altered standard deductions. While the above rates and brackets are at the federal level, different states might have varying brackets and rates.
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