2021 Tax Brackets and Income Tax Rates

2021 Tax Brackets and Income Tax Rates
The IRS has released the 2021 tax brackets and income tax rates, including tax deductions, tax credits and cost-of-living adjustments. These new tax rates are effective beginning January 1, 2021 and apply for the 2021 income tax year.
In this article, we will discuss:

Compare The Best Student Loan Refinance Rates For 2020

Lender
APR
Minimum Credit
2.26% – 6.29%
650

Overview

KeyValue
Variable Rates:2.26% – 6.29%
Fixed Rates:2.99% – 6.28%
Minimum Credit Score:650
Minimum Income:None
Fees:None
Minimum Loan Amount:$5,000 ($10,000 in CA)

Details

KeyValue
Eligible Loans:Private & Federal
Eligible Degrees:Undergraduate & Graduate
Loan Terms:5, 7, 10, 15, 20 years
Borrower Residency:All states
Hardship Deferment:Yes
Co-signer Option:Yes

1.99% – 5.49%
650

Overview

KeyValue
Variable Rates:1.99% – 5.34%
Fixed Rates:2.98% – 5.49%
Minimum Credit Score:650
Minimum Income:None
Fees:None
Minimum Loan Amount:$5,000

Details

KeyValue
Eligible Loans:Private & Federal
Eligible Degrees:Undergraduate & Graduate
Loan Terms:5-20 years
Borrower Residency:All States except KY or NV
Hardship Deferment:Yes
Co-signer Option:No
2.39% – 6.01%
680

Overview

KeyValue
Variable Rates:2.39% – 6.01%
Fixed Rates:2.79% – 5.99%
Minimum Credit Score:680
Minimum Income:$35,000
Fees:None
Minimum Loan Amount:$15,000

Details

KeyValue
Eligible Loans:Private & Federal
Eligible Degrees:Undergraduate & Graduate
Loan Terms:5, 7, 10, 15, 20 years
Borrower Residency:All States
Hardship Deferment:Yes
Co-signer Option:Yes

1.89% – 6.66%

660

Overview

KeyValue
Variable Rates:1.89% – 6.66%
Fixed Rates:2.63% – 6.63%
Minimum Credit Score:660
Minimum Income:None
Fees:None
Minimum Loan Amount:$5,000

Details

KeyValue
Eligible Loans:Private & Federal
Eligible Degrees:Undergraduate & Graduate
Loan Terms:5 – 20 years
Borrower Residency:All states
Hardship Deferment:Varies
Co-signer Option:Yes

1.89% – 6.00%
700

Overview

KeyValue
Variable Rates:1.89% – 5.90%
Fixed Rates:2.80% – 6.00%
Minimum Credit Score:700
Minimum Income:None
Fees:None
Minimum Loan Amount:$5,000

Details

KeyValue
Eligible Loans:Private & Federal
Eligible Degrees:Undergraduate & Graduate
Loan Terms:5, 7, 10, 15, 20 years
Borrower Residency:All States
Hardship Deferment:Yes
Co-signer Option:Yes

1.95% – 3.85%

660

Overview

KeyValue
Overall Rate:1.95% – 3.85%
Variable Rates:
Fixed Rates:1.95% – 3.85%
Minimum Credit Score:None
Minimum Income:None
Fees:None
Minimum Loan Amount:$25,000

Details

KeyValue
Eligible Loans:Private & Federal
Eligible Degrees:Undergraduate & Graduate
Loan Terms:5, 7, 10, 15 years
Borrower Residency:Must live near a branch in California; New York City; Boston; Greenwich, Connecticut; Palm Beach, Florida; Portland, Oregon; or Jackson, Wyoming
Hardship Deferment:No
Co-signer Option:Yes
1.97% – 8.77%
680

Overview

KeyValue
Variable Rates:1.97% – 8.54%
Fixed Rates:2.99% – 8.77%
Minimum Credit Score:680
Minimum Income:$24,000
Fees:None
Minimum Loan Amount:$5,000

Details

KeyValue
Eligible Loans:Private & Federal
Eligible Degrees:Undergraduate & Graduate
Loan Terms:5, 7, 10, 15, 20 years
Borrower Residency:All states, except ME, ND, NV, RI, WV
Hardship Deferment:Yes
Co-signer Option:Yes

Checking Your Rate Doesn’t Affect Your Credit Score
Disclosures: Earnest | ELFI | Laurel Road | LendKey | SoFi | Splash

Tax Brackets and Tax Rates

In 2021, there are seven income tax brackets: 10%, 12%, 22%, 24%, 32%, 35% and 37%. Here is the breakdown depending if you file as:
  • Individual Taxpayer
  • Married Filing Jointly
  • Married Filing Separate
  • Head of Household

Individual Taxpayer

If Taxable Income Is Between:The Tax Due Is:
0 - $9,95010% of taxable income
$9,951 - $40,525$995 + 12% of the amount over $9,950
$40,526 - $86,375$4,664 + 22% of the amount over $40,525
$86,376 - $164,925$14,751 + 24% of the amount over $86,375
$164,926 - $209,425$33,603 + 32% of the amount over $164,925
$209,426 - $523,600$47,843 + 35% of the amount over $209,425
$523,601 or more$157,804.25 + 37% of the amount over $523,600

Source: IRS, Forbes

Married Filing Jointly

If Taxable Income Is Between:The Tax Due Is:
0 - $19,90010% of taxable income
$19,901 - $81,050$1,990 + 12% of the amount over $19,900
$81,051 - $172,750$9,328 + 22% of the amount over $81,050
$172,751 - $329,850$29,502 + 24% of the amount over $172,750
$329,851 - $418,850$67,206 + 32% of the amount over $329,850
$418,851 - $628,300$95,686 + 35% of the amount over $418,850
$628,301 or more$168,933.50 + 37% of the amount over $628,300

Source: IRS, Forbes

Married Filing Separately

If Taxable Income Is Between:The Tax Due Is:
0 - $9,95010% of taxable income
$9,951 - $40,525$995 + 12% of the amount over $9,950
$40,526 - $86,375$4,664 + 22% of the amount over $40,525
$86,376 - $164,925$14,751 + 24% of the amount over $86,375
$164,926 - $209,425$33,603 + 32% of the amount over $164,925
$209,426 - $314,150$47,843 + 35% of the amount over $209,425
$314,151$84,496.75 + 37% of the amount over $314,150

Source: IRS, Forbes

Heads of Household

If Taxable Income Is Between:The Tax Due Is:
0 - $14,20010% of taxable income
$14,201 - $54,200$1,420 + 12% of the amount over $14,200
$54,201 - $86,350$6,220+ 22% of the amount over $54,200
$86,351 - $164,900$13,293 + 24% of the amount over $86,350
$164,901 - $209,400$32,145 + 32% of the amount over $164,900
$209,401 - $523,600$46,385 + 35% of the amount over $209,400
$523,601 or more$156,355 + 37% of the amount over $523,600

Source: IRS, Forbes

Standard Deduction

In 2021, the standard deduction will increase slightly to $12,550 for individual taxpayers and married couple filing separately. The standard deduction for married couples filing jointly will be $25,100. The standard deduction for head of households will be $18,800.
Filing Status:Standard Deduction Amount:
Single$12,550
Married Filing Jointly & Surviving Spouses$25,100
Married Filing Separately$12,550
Heads of Household$18,800

Source: IRS, Forbes

Capital Gains Tax

Capital gains taxes are taxes on the growth of the value of an investment when an individual sells that investment. Long-term capital gains is applied to assets or investments that held for more than one year. The long-term capital gains rates are 0%, 15% and 20%. Short-term capital gains is when an asset or investment is sold within one year or less. The short-term capital gains tax rate is the same as the ordinary income tax rate. The table below shows the maximum capital gains rate for 0% and 15%:

Maximum Capital Gains Rates

Filing Status:Maximum Zero Rate Amount:Maximum 15% rate Amount
Married Filing Jointly & Surviving Spouses$80,800$501,600
Married Filing Separately$40,400$250,800
Heads of Household$54,100$473,750
Individual Taxpayers$40,400$445,850
Trusts and Estates$2,700$13,250

Source: IRS, Forbes

Alternative Minimum Tax

The Alternative Minimum Tax, or AMT, applies to taxpayers with higher income and ensures that these taxpayers pay at least a minimum amount of tax. These are the exemptions amount for the Alternative Minimum Tax for 2021:

Alternative Minimum Tax (AMT) Exemptions

Filing Status:Exemption Amount:
Individual$73,600
Married Filing Jointly & Surviving Spouses$114,600
Married Filing Separately$57,300
Trusts and Estates$25,700

Source: IRS, Forbes

Tax Credits and Tax Deductions

For 2021, there are many types of tax credits and tax deductions that are available. Here are several tax credits and tax deductions:

Child Tax Credit

For 2021, the child tax credit is $2,000 per child. However, there are phaseouts, including $200,000 of income for individual taxpayers and $400,000 for taxpayers who are married filing jointly.

Earned Income Tax Credit (EITC)

For 2021, the Earned Income Tax Credit (EITC) is a maximum $6,728 for taxpayers who are married filing jointly who have three or more children. Like the child tax credit, there are phaseouts based on income.

Itemized Deductions

Here are some popular itemized deductions:

  • Home mortgage interest
  • State and local taxes
  • Charitable donations
  • Medical expenses
  • Job expenses

Above The Line Deductions

Here are several popular above-the-line deductions:

Let's Make Lemonade

Get the latest personal finance advice delivered directly to your inbox.