2022 vs 2021 Tax Brackets - Molen & Associates

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2022 vs 2021 Tax Brackets

It’s never too early to start thinking about your next tax return. Unless you requested an extension to file your 2021 return, the next return that most people will have to file is their federal tax return for the 2022 tax year — which, by the way, will be due on April 18, 2023 (or October 16, 2023, if extended). The 2022 tax rates themselves are the same as the rates in effect for the 2021 tax year: 10%, 12%, 22%, 24%, 32%, 35% and 37%. However, as they are every year, the 2022 tax brackets were adjusted to account for inflation. That means you could wind up in a different tax bracket when you file your 2022 federal income tax return than the bracket you were in before – which also means you could pay a different tax rate on some of your income.

The 2022 and 2021 tax bracket ranges also differ depending on your filing status. For example, for single filers, the 22% tax bracket for the 2022 tax year starts at $41,776 and ends at $89,075. However, for head-of-household filers, it goes from $55,901 to $89,050. (For 2021, the 22% tax bracket for singles went from $40,526 to $86,375, while the same rate applied to head-of-household filers with taxable income from $54,201 to $86,350.) So, that’s something else to keep in mind when you’re filing a return or planning to reduce a future tax bill.

Now, let’s get to the actual tax brackets for 2022 and 2021. When you’re working on your 2022 federal income tax return next year, here are the tax brackets and rates you’ll need:

2022 Tax Brackets for Single Filers and Married Couples Filing Jointly

Tax RateTaxable Income
(Single)
Taxable Income
(Married Filing Jointly)
10%Up to $10,275Up to $20,550
12%$10,276 to $41,775$20,551 to $83,550
22%$41,776 to $89,075$83,551 to $178,150
24%$89,076 to $170,050$178,151 to $340,100
32%$170,051 to $215,950$340,101 to $431,900
35%$215,951 to $539,900$431,901 to $647,850
37%Over $539,900Over $647,850

2022 Tax Brackets for Married Couples Filing Separately and Head-of-Household Filers

Tax RateTaxable Income
(Married Filing Separately)
Taxable Income
(Head of Household)
10%Up to $10,275Up to $14,650
12%$10,276 to $41,775$14,651 to $55,900
22%$41,776 to $89,075$55,901 to $89,050
24%$89,076 to $170,050$89,051 to $170,050
32%$170,051 to $215,950$170,051 to $215,950
35%$215,951 to $323,925$215,951 to $539,900
37%Over $332,925Over $539,900

If you still haven’t filed your 2021 tax return yet, or you just want to compare to see what’s changed, here are the 2021 tax brackets and rates:

2021 Tax Brackets for Single Filers and Married Couples Filing Jointly

Tax RateTaxable Income
(Single)
Taxable Income
(Married Filing Jointly)
10%Up to $9,950Up to $19,900
12%$9,951 to $40,525$19,901 to $81,050
22%$40,526 to $86,375$81,051 to $172,750
24%$86,376 to $164,925$172,751 to $329,850
32%$164,926 to $209,425$329,851 to $418,850
35%$209,426 to $523,600$418,851 to $628,300
37%Over $523,600Over $628,300

2021 Tax Brackets for Married Couples Filing Separately and Head-of-Household Filers

Tax RateTaxable Income
(Married Filing Separately)
Taxable Income
(Head of Household)
10%Up to $9,950Up to $14,200
12%$9,951 to $40,525$14,201 to $54,200
22%$40,526 to $86,375$54,201 to $86,350
24%$86,376 to $164,925$86,351 to $164,900
32%$164,926 to $209,425$164,901 to $209,400
35%$209,426 to $314,150$209,401 to $523,600
37%Over $314,150Over $523,600

How do tax brackets work?

Learn more about how tax brackets work HERE.

Suppose you’re single and end up with $100,000 of taxable income in 2022. Since $100,000 is in the 24% bracket for singles, will your 2022 tax bill simply a flat 24% of $100,000 – or $24,000? No! Your tax is actually less than that amount. That’s because, using marginal tax rates, only a portion of your income is taxed at the 24% rate. The rest of it is taxed at the 10%, 12%, and 22% rates.
Here’s how it works. Again, assuming you’re single with $100,000 taxable income in 2022, the first $10,275 of your income is taxed at the 10% rate for $1,028 of tax. The next $31,500 of income (the amount from $10,276 to $41,775) is taxed at the 12% rate for an additional $3,780 of tax. After that, the next $47,300 of your income (from $41,776 to $89,075) is taxed at the 22% rate for $10,406 of tax. That leaves only $10,925 of your taxable income (the amount over $89,075) that is taxed at the 24% rate, which comes to an additional $2,622 of tax. When you add it all up, your total 2022 tax is only $17,836. (That’s $6,164 less than if a flat 24% rate was applied to the entire $100,000.)

source: https://www.kiplinger.com/taxes/tax-brackets/602222/income-tax-brackets

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