Every year, millions of married couples in the United States must file their taxes jointly, and the process can be confusing for those who are unfamiliar with the tax system. Knowing the tax brackets and how to use them can help married couples make the most of their tax return. In 2021, the tax brackets for married couples filing jointly will remain the same as they have been in the past few years.
Understanding Tax Brackets
Before we dive into the specifics of tax brackets for married couples in 2021, it’s important to understand what tax brackets are. A tax bracket is a range of income that is taxed at a certain rate. Each range of income is taxed at a different rate, and the higher the income, the higher the tax rate. For example, if a married couple has a taxable income of $50,000, they will be subject to a lower tax rate than if they had a taxable income of $100,000.
Tax brackets are important for married couples to understand because they can help them plan for their tax return each year. By understanding their income range and the corresponding tax rate, married couples can plan ahead and ensure that they are taking the necessary steps to lower their taxable income and minimize their tax liability.
Tax Brackets for Married Couples in 2021
The tax brackets for married couples filing jointly in 2021 are as follows:
- 10%: $0 - $19,400
- 12%: $19,401 - $78,950
- 22%: $78,951 - $168,400
- 24%: $168,401 - $321,450
- 32%: $321,451 - $408,200
- 35%: $408,201 - $612,350
- 37%: $612,351+
As you can see, the tax rate increases as the taxable income of the married couple increases. This means that if a married couple has a taxable income of $50,000, they will fall into the 12% tax bracket and will have to pay 12% of their income in taxes. If a married couple has a taxable income of $100,000, they will fall into the 22% tax bracket and will have to pay 22% of their income in taxes.
Reducing Your Tax Liability
Even though married couples must use the tax brackets to calculate their tax liability, there are still some ways to reduce their tax burden. One of the most common ways to reduce taxable income is to take advantage of deductions and credits. Deductions are expenses that can be subtracted from a married couple’s taxable income, thus lowering their tax liability. Credits are similar, but they are applied directly to the tax amount owed, thus reducing the amount of taxes owed.
Married couples should also consider taking advantage of retirement accounts, such as IRA’s and 401(k)’s. These accounts can help reduce taxable income by allowing married couples to save money for retirement while also reducing their tax burden. Finally, married couples should consider taking advantage of tax-advantaged investments, such as mutual funds and ETFs, which can help them reduce their taxable income and reduce their tax burden.
Final Thoughts on Tax Brackets for Married Couples in 2021
Filing taxes as a married couple can be a complicated process, but understanding the tax brackets can help. The tax brackets for married couples filing jointly in 2021 remain the same as they were in the past few years, so married couples should be familiar with them. Additionally, married couples can take advantage of deductions and credits to help reduce their tax liability, as well as take advantage of retirement accounts and tax-advantaged investments.
By understanding the tax brackets and taking advantage of the available tax benefits, married couples can maximize their tax return and minimize the amount of taxes they owe. With the knowledge of the tax brackets, married couples can better plan their finances and ensure they are taking the necessary steps to maximize their tax return.
