What Are the Income Tax Brackets for 2020 vs. 2019?
Article by Rocky Mengle, Tax Editor Kiplinger
Tax planning is all about thinking ahead. So, now that the IRS has released the new tax brackets for the 2020 tax year, you can (and should) start thinking about how to handle your 2020 finances in a tax-efficient way–even though you haven’t filed your 2019 tax return yet. The 2020 tax rates themselves didn’t change. They’re the same as the seven tax rates in effect for the 2019 tax year: 10%, 12%, 22%, 24%, 32%, 35% and 37%. However, the tax bracket ranges were adjusted, or “indexed,” to account for inflation.
2020 Tax Brackets for Single/Married Filing Jointly
(Single) Taxable Income
(Married Filing Jointly)
| 10% | Up to $9,875 | Up to $19,750 |
| 12% | $9,876 to $40,125 | $19,751 to $80,250 |
| 22% | $40,126 to $85,525 | $80,251 to $171,050 |
| 24% | $85,526 to $163,300 | $171,051 to $326,600 |
| 32% | $163,301 to $207,350 | $326,601 to $414,700 |
| 35% | $207,351 to $518,400 | $414,701 to $622,050 |
| 37% | Over $518,400 | Over $622,050 |
One other thing to note is that Congress recently changed the indexing method used to adjust the tax brackets for inflation. Before 2019, the standard Consumer Price Index was used to adjust the brackets. However, some economists believed that formula didn’t fully account for changes in spending as prices rise. As a result, the 2017 tax reform law adopted the “chained” CPI formula that the IRS now uses.
Chained indexing generally results in lower inflation adjustments to the tax brackets each year, which in turn means you could find yourself in a higher tax bracket on your next return. Why? If your income increases faster than the rate of inflation, you eventually move up to a higher bracket. Since the IRS is using lower inflation adjustments, then the chances that your income will grow faster than the IRS’s rate of inflation rise.
2020 Tax Brackets for Married Filing Separately/Head of Household
(Married Filing Separately) Taxable Income
(Head of Household)
| 10% | Up to $9,875 | Up to $14,100 |
| 12% | $9,876 to $40,125 | $14,101 to $53,700 |
| 22% | $40,126 to $85,525 | $53,701 to $85,500 |
| 24% | $85,526 to $163,300 | $85,501 to $163,300 |
| 32% | $163,301 to $207,350 | $163,301 to $207,350 |
| 35% | $207,351 to $311,025 | $207,351 to $518,400 |
| 37% | Over $311,025 | Over $518,400 |
The federal “marriage penalty” also still exists–barely. This tax-law twist makes certain couples–typically, those whose incomes are similar–filing a joint return pay more tax than they would if they were single. It’s triggered when, for any given rate, the minimum taxable income for joint filers is less than twice the amount for single filers. Before the 2017 tax reform law, this happened in the four highest tax brackets. Now, however, only the top federal tax bracket contains the marriage penalty trap. As a result, only couples with a combined taxable income over $622,050 are at risk when filing their 2020 federal tax return.
See Also: States With a “Marriage Penalty” in Their Tax Brackets
Standard Deduction and Personal Exemptions
The standard deduction amounts are adjusted for inflation, too. For joint filers, the 2020 standard deduction is $400 more than the 2019 amount. It goes up $200 in 2020 for single filers and married taxpayers filing a separate return. For heads of households, the standard deduction jumps $300 for 2020.
2020 Standard Deduction Amounts
Filing Status Standard Deduction
| Single; Married Filing Separately | $12,400 |
| Married Filing Jointly | $24,800 |
| Head of Household | $18,650 |
Taxpayers who are at least 65 years old or blind can claim an additional standard deduction of $1,300 ($1,650 if using the single or head of household filing status). For anyone who is both 65 and blind, the additional deduction amount is doubled.
As in 2019, personal exemption deductions aren’t allowed for 2020. They were eliminated by the 2017 tax reform law.
By the way, it’s always a good idea to check your income tax withholding each year–especially, if you’re moving into a different tax bracket or experience some other significant shift in your financial situation. Look for changes to how withholding amounts are computed starting in 2020, but in the meantime we have a handy tax withholding calculator that can help you nail down your withholding for the rest of 2019. Even though the IRS is changing Form W-4 starting in 2020, if you don’t submit a new W-4 after 2019, your employer will continue to use the information from your pre-2020 W-4 to calculate your withholding.
Finally, here are the tax brackets for the 2019 tax year, for comparison’s sake:
2019 Tax Brackets for Single/Married Filing Jointly
(Single) Taxable Income
(Married Filing Jointly)
| 10% | Up to $9,700 | Up 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% | Over $510,300 | Over $612,350 |
2019 Tax Brackets for Married Filing Separately/Head of Household
(Married Filing Separately) Taxable Income
(Head of Household)
| 10% | Up to $9,700 | Up to $13,850 |
| 12% | $9,701 to $39,475 | $13,851 to $52,850 |
| 22% | $39,476 to $84,200 | $52,851 to $84,200 |
| 24% | $84,201 to $160,725 | $84,201 to $160,700 |
| 32% | $160,726 to $204,100 | $160,701 to $204,100 |
| 35% | $204,101 to $306,175 | $204,101 to $510,300 |
| 37% | Over $306,175 | Over $510,300 |
Article by Rocky Mengle, Tax Editor Kiplinger
