With two months left in 2020, the IRS has released the new tax brackets for 2021. They're adjusted every year to account for inflation.
Once again, there are seven tax brackets: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. They're marginal brackets, which means different portions of your income will be taxed at different rates.
The lowest rate of 10% applies to single taxpayers who make $9,950 or less, or married couples who earn under $19,900.
If you make more than that, any income up to $40,525 for singles and $81,050 for married couples will be taxed at 12 percent. After that, the rate is 22% for singles earning up to $86,375 and married couples who earn $172,750.
The next bracket is 24% for single earners of up to $164,925 and married couples earning up to $329,850. A 32% rate applies to singles with income up to $209,425 and married couples who earn up to $418,850.
After that a 35% rate will hit single taxpayers who earn up to $523,600 and couples who make up to $628,000. Those lucky enough to earn more than that will get hit with a 37% tax rate.
Compared to 2020, next year's tax rates will jump about 1%.
Additional details can be found on the IRS website.
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