The 2021 standard deduction has increased as well Qualified widow(er) with dependent child: $250,000Īnd here's how they compare to 2020's capital gains tax brackets:ĭata Source: IRS.This applies to taxpayers who have net investment income and modified adjusted gross income (MAGI) over the following thresholds (Note: Under current tax law, these amounts do not change from year-to-year: In addition to these rates, a 3.8% net investment income tax is assessed on the capital gains of high earners, regardless of whether they are long- or short-term in nature. Figures represent taxable income, not just taxable capital gains. But long-term gains that result from sales of assets held for over a year get a preferential tax treatment, and are taxed according to these brackets for 2021:ĭata source: IRS. Any capital gains that result from selling an asset you owned for a year or less will be treated as a short-term gain and will be taxable according to the tax brackets listed earlier.

When it comes to capital gains, the tax treatment depends on how long you owned the asset. For example, if you sell a stock for more than you paid for it, you have a capital gain. Not all income is taxed according to the marginal tax brackets, and capital gains (income from when you sell an investment or asset for a profit) are the big exception. Tax brackets for married couples filing separate returns:ĭata source: IRS. Tax brackets for head of household filers: Tax brackets for married couples filing a joint return: If you are wondering how much tax you'll owe when you go to file your 2020 tax return in April 2021, here's a quick guide to the 2020 U.S. To clarify, the 2021 tax brackets are the rates that will determine your income tax in 2021, which is the tax return you'll file in 2022. For 2021, the tax bracket thresholds were increased by approximately 1% over 2020 levels. Instead, tax brackets for married couples filing separately are half of what they are for the corresponding marginal tax brackets for joint filers.Įach year, the IRS adjusts the tax brackets for inflation. It comes as a surprise to many people, but the tax brackets for married couples who choose to file separate returns aren't the same as for single filers. Now, tax brackets for married couples filing separate returns. Single parents generally use the head of household status, for example. In a nutshell, the head of household status is designed for people who are unmarried but have dependents. Here are the tax brackets for head of household filers. Now, tax brackets for married couples filing a joint return: federal income tax brackets.įirst, the tax brackets for single filers:

2021 irs tax brackets