How to check what tax bracket I am in for filing in 2022
The United States taxes income on a progressive scale, the more you earn the more you pay, dividing incomes into seven brackets. Which one do you fall into?
Those getting an early start on calculating their tax filing for the 2021 fiscal year will want to know to know a few things before they get started. First and foremost is which of the seven tax brackets applies to you.
The tax brackets range from 10 percent to 37 percent of a taxpayer’s taxable income. Taxpayers can use a number of deductions to reduce their tax liability and even put them into a lower tax bracket further lowering what the owe in taxes.
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Getting started: find your filing status
First off, you’ll want to determine your filing status to calculate your tax bracket, using the right one can make a difference in how much tax you owe for the year. It can also determine whether you need to file a tax return, low-income earners below a threshold are not required to report their income. However, there are several tax provisions included in the American Rescue Plan which taxpayers can take advantage of for the 2021 fiscal year that could lead to a tax refund making worth filing even if not required to.
There are five categories of filers and conditions apply to which one you should use to file your taxes. The main determiner is your marital status on 31 December of the year for which you are reporting taxes, that will be the one you use for the entire year. It’s possible that more than one filing status applies to you, so the IRS recommends that you use the filing status that will reduce your tax liability the most.
To help taxpayers determine which filing status applies to them the IRS has an online tool “What Is My Filing Status?”
Single: For those who are not married, divorced or legally separated.
Married Filing Jointly: Married couples can choose to file a joint tax return. Widow(er)s can also use this in the year their spouse died.
Married Filing Separately: Married couples also have the choice of filing separately if it is more financially beneficial.
Head of Household: The IRS cautions not to choose the by mistake and special rules apply to qualify for this filing status. Generally, this status applies if you are not married and must have paid more than half the cost of keeping up a home for yourself and a qualifying person.
Qualifying Widow(er) with Dependent Child: This status is similar to married filing jointly. It is applicable for only two years and conditions apply.
For more information check the Dependents, Standard Deduction, and Filing Information in Publication 501.
How to calculate your tax bracket
As you sit down to figure out your tax bracket, you’ll want to pull together documents for all income that you’ve receive during the year, as well as receipts for expenses incurred over the year, be they for work, education or childcare. You’ll also want to breakout a pad of paper and calculator or enter the information on a digital spread sheet.
You will need to report all of your income whether taxable and non-taxable when you file, however you will only pay taxes on your "taxable income figure" that you'll need to work out through some calculations. You will need to calculate your total income both earned and unearned to get your gross annual income. Mind you the Economic Impact Payments, or stimulus checks, and the advance Child Tax Credit payments are not income but an advance on a tax rebate from the federal government. Unemployment compensation, although considered unearned income, is taxable.
Next subtract any adjustments, or above-the-line deductions, to figure out your adjusted gross income (AGI). These can include contributions to a traditional IRA, student loan interest, health savings account, self-employment deductions, and other expenses. For more guidance check the IRS Publication 17.
You can then subtract both itemized tax deductions and the standard deduction from your AGI. To further lower your taxable income amount, subtract any tax exemptions that you are eligible for. With that you have arrived at the figure for your taxable income, and you can now determine which of the seven tax brackets you fall into.
Single filers
2021 Tax Brackets
- 37% for income over $523,600
- 35% for income over $209,425
- 32% for income over $164,925
- 24% for income over $86,375
- 22% for income over $40,525
- 12% for income over $9,950
- 10% for income of $9,950 or less
Married couples filing separately
2021 Tax Brackets
- 37% for income over $314,150
- 35% for income over $209,425
- 32% for income over $164,925
- 24% for income over $86,375
- 22% for income over $40,525
- 12% for income over $9,950
- 10% for income of $9,950 or less
Married couples filing jointly & surviving spouses
2021 Tax Brackets
- 37% for income over $628,300
- 35% for income over $418,850
- 32% for income over $329,850
- 24% for income over $172,750
- 22% for income over $81,050
- 12% for inccome over $19,900
- 10% for income of $19,900 or less
Head of Household
2021 Tax Brackets
- 37% for income over $523,600
- 35% for income over $209,400
- 32% for income over $164,900
- 24% for income over $86,350
- 22% for income over $54,200
- 12% for income over $14,200
- 10% for income of $14,200 or less
Calculating the tax you owe
The tax brackets are progressive, so if you file as a single filer and have a taxable income of $50,000, you don’t pay 22 percent on the whole of your taxable income. You would pay 10 percent on the first $9,950 ($995), 12 percent on the income between $9,950 and $40,525 ($3,669), and then 22 percent on the remaining $9,475 ($2,084.50) for a total of $6,748.50 as opposed to $11,000.
However, keep in mind that you may be eligible for tax credits based on your AGI that would reduce what you owe. Or, if they are refundable, such as the Earned Income Tax Credit (EITC) or the Child and Dependent Care Credit, even give you a tax refund.