2019 Federal Income Tax Brackets and Standard Deduction (UPDATED)

The numbers are in. Here’s what you need to know before you file taxes in 2020.

2019 tax brackets and standard deduction

You might think it’s too early to consider 2019 tax brackets. After all, you won’t file your 2019 taxes for months yet. Not until 2020! But understanding your tax bracket can help you make all sorts of helpful financial decisions, especially if you’re right on the line between two tax brackets. In that case, finding a way to bring your taxable income down even a little can save you a big chunk of change.

The numbers below are for this year, so they’re what you’ll see or use when you file your taxes in 2020. Here’s what you can expect from your 2019 deductions and tax rates.

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2019 Standard Deduction

The standard deduction jumped by a lot for the 2018 tax year. But in 2019, it’ll only be adjusted for inflation. So the deductions are as follows:

  • Married Filing Jointly/Surviving Spouse: $24,400
  • Heads of Households: $18,350
  • Single/Married Filing Separately: $12,200

How Tax Brackets Work

A tax bracket is simply a set of income brackets that are to be taxed at a specified rate. A component of progressive income tax systems, tax brackets increase progressively with the increase in your income. The idea is to increase the tax burden on the higher-income groups while making it affordable for the lower-income groups to pay their taxes.

Currently, there are seven federal income tax brackets in the U.S ranging from 10% to 37%. These rates apply to the taxable income, which is your gross income after allowable itemized deductions. Following are the seven tax rates that apply to seven different income brackets:

Income Bracket NumberTax Rate
110%
212%
322%
424%
532%
635%
737%

The above table provides the different tax rates applicable to the seven different income groups in the U.S. At this point, you would want to know what tax percent applies to you. Well, you can easily find this out by referring to the following table that breaks down the tax brackets.

Tax RateTaxable Income (Single Filer)Taxable Income (Married, Filing Jointly)
10%$0 to $9,700$0 to $19,400
12%$9,701 to $39,475$19,401 to $78,950
22%$39,476 to $84,200$78,951 to $168,400
24%$84,201 to $160,725$168,401 to $321,450
32%$160,726 to $204,100$321,451 to $408,200
35%$204,101 to $510,300$408,201 to $612,350
37%$510,301 or more$612,351 or more

So, you now know the income bracket you fall into for taxation purposes. But how does the tax bracket work exactly?

Let’s suppose, you’re a single filer in the 10% tax bracket. Working out your tax amount will be extremely easy for you now. Simply multiply your income by the 10% rate and you will get the payable tax amount. For example, if your taxable income is $8,000, you will have to pay $800 as tax. It’s that simple.

However, things get a little trickier as you move up the table and towards a higher income bracket. Say, you’re a single file and fall in the 22% tax bracket. Now, this does not mean that you will have to pay 22% of your taxable income as tax. Instead, you will pay 10% on the first $9,525 of your income, 12% on the amount between $9,526 and $38,700, and 22% on the amount between $38,701 to $82,500.

How to Use the Federal Income Tax Table

As mentioned earlier, the federal income tax bracket follows a progressive income tax system. What does this mean? It means that as your taxable income increases, the tax rate applicable to you will also increase. Depending on the filing status (single-filer or married, filing jointly), different tax rates are applied on income in different brackets or ranges.

For example, a 37% tax rate is currently applied to single filers with a taxable income of over $500,000 and joint filers with a taxable income of $600,000. However, only the income in a specific tax bracket is subjected to the tax rate. This means that single filers earning over $500,000 will have to pay a 24% tax on only that amount of income which exceeds $500,000. So, if a person’s income is $525,000, then a 37% tax rate will be applied to only $25,000 of the income.

There is a significant advantage for married taxpayers filing jointly as all tax brackets for them are almost twice the size of those for singles; the only exception being the highest tax bracket. This means that married couples filing jointly pay far less tax than they would have filed as a single person. In the next section is a list of tables breaking down the tax brackets for different filers.

2019 Tax Rates

The tax rates for each year are published in table form. The top tax rate is 37%, and the lowest is 10%. These income brackets are also changed with inflation each year. Check out this article if you want to know more about how the marginal tax rate system works. For income you earn in 2019, your tax rate will be as follows, depending on which category you’re in.

Table 1. Married Filing Jointly and Surviving Spouses

Taxable IncomeTaxes
Up to $19,40010% of taxable income
Between $19,400 and $78,950$1,940 plus 12% of income over $19,400
Between $78,950 and $168,400$9,086 plus 22% of income over $78,950
Between $168,400 and $321,450$28,765 plus 24% of income over $168,400
Between $321,450 and $408,200$65,497 plus 32% of income over $408,200
Between $408,200 and $612,350$93,257 plus 35% of income over $612,350
More than $612,350$164,706 plus 37% of income over $612,350

Table 2. Heads of Households

Taxable IncomeTaxes
Up to $13,60010% of taxable income
Between $13,850 and $52,850$1,385 plus 12% of income over $13,850
Between $52,850 and $84,200$6,065 plus 22% of income over $52,850
Over $84,200 and $160,700$12,742 plus 24% of income over $84,299
Over $160,700 and $204,100$31,102 plus 32% of income over $160,700
Over $204,100 and $510,300$44,990 plus 35% of income over $204,100
Over $510,300$152,160 plus 37% of income over $510,300

Table 3. Single Filers

Taxable IncomeTaxes
Up to $9,70010% of taxable income
Between $9,700 and $39,475$970 plus 12% of income over $9,700
Between $39,475 and $84,200$4,543 plus 22% of income over $19,400
Between $84,200 and $160,725$14,382 plus 24% of income over $84,200
Between $160,725 and $204,100$32,748 plus 32% of income over $160,725
Between $204,100 and $510,300$46, 628 plus 35% of income over $204,100
Over $510,300$13,798 plus 37% of income over $510,300

Table 4. Married Filing Separately

Taxable IncomeTaxes
Up to $9,70010% of taxable income
Between $9,700 and $39,475$970 plus 12% of income over $9,700
Between $39,475 and $84,200$4,543 plus 22% of income over $39,475
Between $84,200 and $160,725$14,382 plus 24% of income over $84,200
Between $160, 725 and $204,100$32,748 plus 32% of income over $160,725
Between $204,100 and $306,175$46,628 plus 35% of income over $204,100
Over $306,175$82,354 plus 37% of income over $306,175

Remember that these numbers are for the 2019 tax year so you’ll use them when filing taxes in 2020. 

Calculating Your 2019 Federal Income Tax

You can easily work out your federal income tax based on your filing status by using the above tables as a reference point. However, just to give you an idea of how the math for this works, the following are some examples of how federal income tax are calculated.

Say, you’re a single filer with a taxable income of $50,000. Now, the tax rate that will apply to you is 22%. Following is how the tax rate will be applied to you:

$9,700 x 10% = $970.00

$28,775 x 12% = $3,573

$10,525 x 22% = $2,315

Total tax = $6,858

Now, suppose your friend, Amanda, has a taxable income of $100,000. A 24% tax rate would apply to her. Following is how her tax amount will be calculated:

$9,700 x 10%= $970.00

$28,775 x 12%= $3,573

$44,724 x 22%= $9,840

$15,800 x 24%= $3,792

Total Tax = $18,175

If the two of you were to get married and then file jointly, then following is how your tax will be calculated:

$19,400 x 10% = $1,940

$59,550 x 12% = $7,146

$71,050 x 22% = $15,631

Total Tax = $24,717

If you have been able to follow and retain the information given in this post, you can confidently say that you know how income tax brackets work, how to use the federal income tax bracket, and how to calculate your federal income tax.

Next Steps

Keep an eye on your income for the year. If it looks like you’ll be close to the line on one of these tax brackets, find some possible ways to reduce your taxable income. This could include putting more money into a tax-advantaged retirement account or a health-savings account. Or you could find ways to increase your personal deductions. Pushing your income to the next tax bracket down can really make a difference when it’s time to file!

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Topics: Taxes

The post 2019 Federal Income Tax Brackets and Standard Deduction (UPDATED) appeared first on The Dough Roller.




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