Tax Brackets For Married Filing Jointly In 2021
For couples filing their taxes together as married filing jointly, 2021 brings some changes. The new tax brackets are based on your adjusted gross income (AGI). Depending on your AGI, there are seven tax brackets that you may be subject to. These brackets are set up so that individuals with higher incomes pay higher tax rates, while those with lower incomes pay lower rates. Read on for a breakdown of the tax brackets for married filing jointly in 2021.
What are the 2021 Tax Brackets?
The 2021 tax brackets for married filing jointly are as follows:
- 10% on income up to $19,400
- 12% on income between $19,401 and $78,950
- 22% on income between $78,951 and $168,400
- 24% on income between $168,401 and $321,450
- 32% on income between $321,451 and $408,200
- 35% on income between $408,201 and $622,050
- 37% on income over $622,051
It’s important to note that your AGI is calculated differently than your total income. To find your AGI, you must subtract certain deductions from your total income. These deductions include qualifying medical expenses, certain types of retirement contributions, certain state and local taxes, and alimony, among others. If you have any questions about what can be deducted from your total income, you should consult a tax professional.
What if My Income is Above or Below the Brackets?
If your income is above or below the brackets, you may be eligible for certain tax credits or deductions. For instance, if your income is lower than the lowest tax bracket, you may be eligible for the Earned Income Tax Credit. This credit is designed to help low-income earners by providing them with a tax break. Additionally, if your income is higher than the highest bracket, you may be able to deduct certain expenses from your taxes, such as charitable donations or business expenses.
What if I Have Children?
If you have children, you may be eligible for certain tax credits. The Child Tax Credit is available to those with children under the age of 17. The credit is worth up to $2,000 per child and can be claimed on your tax return. Additionally, if you have children in college, you may be able to claim the American Opportunity Tax Credit. This credit is worth up to $2,500 per year and can be claimed on your tax return.
What if I Have a Large Amount of Debt?
If you have a large amount of debt, you may be eligible for the Debt Repayment Credit. This credit is designed to help those with high levels of student loan or credit card debt. You may be able to deduct up to $2,500 of your student loan or credit card debt from your taxes. Additionally, if you have a large amount of medical debt, you may be able to deduct up to $2,500 of your medical expenses from your taxes.
What if I Own a Business?
If you own a business, you may be eligible for certain tax credits. The Small Business Tax Credit is available to those with businesses with less than 500 employees. This credit is worth up to $5,000 per year and can be claimed on your tax return. Additionally, if you have employees, you may be eligible for the Work Opportunity Tax Credit. This credit is designed to reward employers who hire individuals from certain target groups, such as veterans or those receiving assistance from the government.
Conclusion
Filing your taxes as married filing jointly can be a complex process. It’s important to understand the different tax brackets and credits that are available to you so that you can maximize your tax return. Knowing the tax brackets for married filing jointly in 2021 can help you make the most of your tax return and ensure that you don’t pay more than you have to.