The United States has a progressive tax system, which means that taxpayers are taxed at different rates depending on their income level. The current tax brackets are 10%, 15%, 25%, 28%, 33%, 35%, and 37%.
For the tax year 2021, the income thresholds for each tax bracket are:
* 10% bracket: $0 to $9,875 for singles; $0 to $19,750 for married couples filing jointly
* 15% bracket: $9,875 to $40,125 for singles; $19,750 to $80,250 for married couples filing jointly
* 25% bracket: $40,125 to $85,525 for singles; $80,250 to $171,050 for married couples filing jointly
* 28% bracket: $85,525 to $163,300 for singles; $171,050 to $326,600 for married couples filing jointly
* 33% bracket: $163,300 to $207,350 for singles; $326,600 to $414,700 for married couples filing jointly
*35% bracket: $209,426 to $523,600 for singles; $418,851 to $628,300 for married couples filing jointly
*37% bracket: $532,600 or more for singles; $628,300 or more for marries couples filing jointly
Who will the tax bracket change affect?
The proposed tax bracket changes will affect taxpayers with an income of $200,000 or more. Under the proposed changes, there will be a new tax bracket of 39.6% for taxpayers with an income of $200,000 or more.
What are the proposed changes?
The proposed changes would create a new tax bracket of 39.6% for taxpayers with an income of $200,000 or more. The other tax brackets would be unchanged.
How will the changes impact you?
The changes would impact you if you have an income of $200,000 or more. If you are in this income bracket, you would be required to pay 39.6% in taxes on your income.
What can you do to prepare for the changes?
If you are in the affected income bracket, you can begin to plan for the changes by adjusting your tax withholding. You can also make adjustments to your budget to account for the higher taxes you will be required to pay.
Wrapping up
The proposed tax bracket changes would create a new tax bracket of 39.6% for taxpayers with an income of $200,000 or more. The other tax brackets would be unchanged. The changes would impact you if you have an income of $200,000 or more. If you are in this income bracket, you would be required to pay 39.6% in taxes on your income. You can begin to prepare for the changes by adjusting your tax withholding and making adjustments to your budget
If you have questions about your tax brackets or other tax information, visit our contact page to connect with an expert.
