2019-2020 Federal Income Tax Brackets & Tax Rates in USA

2019-2020 Federal Income Tax Brackets & Tax Rates; In the United States, the Internal Revenue Service (IRS) is responsible to carry out the functions of federal tax returns. A progressive tax system is applied by the IRS which means that the tax scale also moves up as the pay scale of the individual goes up. There are seven tax brackets for most ordinary income in the United States. These tax brackets include:

1. 10 percent,
2. 12 percent,
3. 22 percent,
4. 24 percent,
5. 32 percent,
6. 35 percent and
7. 37 percent.

If you are wondering that what is my tax bracket for this year, then the answer is totally depends upon your taxable income for the current year as well as your filing status. The current status of the filer has a lot of importance in determining tax bracket. Filing status can be single, married filing jointly or qualifying widow(er), married filing separately, and head of household. Hurry up to file your taxes now with the best professional assistance and expertise as IRS has announced opening of taxation year 2019 from January 27,2020. The deadline to file your taxes is April 15, 2020 after which penalties will be applied to the late taxpayers.

2019 Federal Income Tax Brackets:

Follow the given table to know the details of federal income tax brackets for 2019 taxation year. It must be noted that following table is valid for the filing returns from 27 January, 2020 to 15 April, 2020. What is the IRS tax bracket for 2019 is all answered in the given table:

2020 Federal Income Tax Brackets:

Follow the given table to know the details of federal income tax brackets for 2020 taxation year. It must be noted that following table is valid for the filing returns due 15 April, 2021, next year. What are the tax rates for 2020 are all available in the given table:

How Does IRS Federal Income Tax Brackets Work?

A single tax bracket can never be insightful for the taxpayers. It is necessary for the taxpayers to concern more than one tax bracket to now about his particular tax rate for current year. Depending on the taxpayer’s filing status, different tax rates are levied on the income falling in different tax brackets. As the taxable income increases, it is taxed at a higher rate because of progressive nature of federal income tax rates in USA. Furthermore, the tax brackets mentioned in the above tables show tax rates for 2019 and 2020 only. Each year, tax brackets are adjusted for inflation. Have a look at IRS tax inflation changes & adjustments for 2020.

How Can I Lower My Tax Bracket For Current Year?

Basically, there are two ways to get into a lower tax bracket.

1. By means of tax credits.
2. By means of tax deductions.

Tax credits contribute to dollar-for-dollar reduction in the income tax bill of taxpayers. It means that if your tax bill is $3,000 and you are eligible for a tax credit of $1,000, then you will be required to pay only $2,000 as your tax bill amount. Tax credits are more helpful to save better amount of money as compared to tax deductions. There are different types of tax credits. Go through the link to know about all tax credits that you can get to minimize tax bill. Apart from these federal tax credits, many state governments also offer different tax credits.

Although, the actual tax bill is greatly reduced by tax credits, the amount of your taxable income is also reduced by tax deductions. You can easily lower your taxable income by means of itemizing expenses, if your deductions limit exceed to the standard deduction for your filing status. For example, you can lower your taxable income if your medical expenses exceed more than 10% of the AGI in 2019. You can also claim refund even if you don’t pay & file taxes to the IRS.

The IRS New Tax Law & Tax Brackets:

The Tax Cuts and Jobs Act became effective from January 1, 2018. Although seven tax brackets are retained by the law but some of the tax rates are lowered. Not only this, some of the income thresholds for those rates have also been raised by the 2018 Tax Cuts and Jobs Act. Now, only 37 percent is paid by the highest earner that was previously 39.6 percent. Before the taxpayers break into the highest tax bracket, they can earn more. The standard deductions are nearly doubled by the new tax law. Fewer taxpayers will itemize with considerably higher standard deductions. For the year 2019, the standard deductions for each filing status are listed below:

• If the taxpayer is Single: $12,200
• If the taxpayer is Head of household: $18,350
• If the taxpayer is Married filing separately: $12,200
• If the taxpayer is Married filing jointly: $24,400
• If the taxpayer is Qualifying widow(er): $24,400

Along with these changes, a lot of the aspects have been changed and modified by the IRS. Contact us to prepare & file accurate income tax returns for 2019, starting from January 27, 2020.