Taxes are on a lot of folks’ minds as we progress into 2022. The tax deadline for the 2021 tax year is looming (April 15), and unlike the past two years, it does not appear that taxes for 2021 will get a deadline extension. The first step for many Americans is to figure out which of the seven federal tax brackets they will be placed in. These tax brackets have the following rates: 10%, 12%, 22%, 24%, 32%, 35% and 37%.
There are many variables that affect these rates. For example, if you are eligible for federal tax deductions, you may be put into a lower tax bracket than your income suggests. If you earn money through a business or an investment, you may be taxed at a level that differs from the income tax bracket. This article looks to provide the reader with more knowledge about federal income taxes for the tax years of 2021 and 2022.
How Do Tax Brackets Work?
While taxes can get complicated, it is important to understand the general framework of the federal government’s progressive tax system. This means that higher-income earners will pay a higher percentage in taxes. Conversely, lower-income earners will pay a smaller percentage of their income to the federal income tax. The idea behind the progressive tax system is to give low-income earners more tax relief while having a larger burden fall on higher-income earners who may have a better capacity to pay these higher rates. With this foundation in mind, there are a few caveats that will affect what tax bracket an individual falls into.
What are the Federal Income Tax Brackets for 2022?
While many are currently concentrating on the 2021 tax year, it is not too early to look ahead to the federal income tax brackets in 2022. Tax brackets tend to be adjusted upwards each year to account for inflation. As you can see in the chart, the percentage of tax you owe will depend on your filing status and your taxable income. Single, married, and head of households are the designations an individual chooses to file their taxes by. The chart below provides detailed information on taxes owed by filing status.
|2022 Federal Income Tax Brackets||Single Filer Taxable income Bracket||Married Filing Jointly Taxable income Bracket||Married Filing Separately Taxable income Bracket||Head of Household Taxable income Bracket|
|10%||$0 to $10,275||$0 to $20,550||$0 to $10,275||$0 to $14,650|
|12%||$10,276 to $41,775||$20,551 to $83,550||$10,276 to $41,775||$14,651 to $55,900|
|22%||$41,776 to $89,075||$83,551 to $178,150||$41,776 to $89,075||$55,901 to $89,050|
|24%||$89,076 to $170,050||$178,151 to $340,100||$89,076 to $170,050||$89,051 to $170,050|
|32%||$170,051 to $215,950|