Cracking the Code: A Guide to Federal Income Tax Rates in the U.S.

What are the federal income tax rates in the United States?

The federal income tax rates in the United States are progressive, meaning the rates increase as income levels rise. The tax rates for individuals are based on taxable income, which is adjusted gross income (AGI) minus any deductions and exemptions. Here are the federal income tax rates for the 2021 tax year (applicable to income earned in 2021):

• 10%: Applies to taxable income up to $9,950 for individuals ($19,900 for married couples filing jointly).

• 12%: Applies to taxable income over $9,950 to $40,525 for individuals ($19,900 to $81,050 for married couples filing jointly).

• 22%: Applies to taxable income over $40,525 to $86,375 for individuals ($81,050 to $172,750 for married couples filing jointly).

• 24%: Applies to taxable income over $86,375 to $164,925 for individuals ($172,750 to $329,850 for married couples filing jointly).

• 32%: Applies to taxable income over $164,925 to $209,425 for individuals ($329,850 to $418,850 for married couples filing jointly).

• 35%: Applies to taxable income over $respective rate. As income moves into a higher bracket, only the additional income is subject to the higher rate.

Different states have their own tax credits, deductions, and exemptions that can impact the effective tax rate. These can include deductions for certain expenses, exemptions for specific types of income, or tax credits for specific activities or situations.

It's important to note that state income tax rates and regulations can change over time. It's advisable to consult the specific state tax agency or a tax professional to get the most up-to-date information on state income tax rates, deductions, credits, and other rules that may apply to your particular situation.