What Are the Income Tax Brackets for 2019 vs. 2018?
It’s never too early to start thinking about your next income tax return. For most taxpayers, that’ll be your return for the 2019 tax year–which, by the way, will be due on April 15, 2020. The 2019 tax rates themselves are the same as the tax rates in effect for the 2018 tax year: 10%, 12%, 22%, 24%, 32%, 35% and 37%. (Most of these rates were lowered by the Tax Cuts and Jobs Act of 2017.) However, as they are every year, the 2019 tax bracket ranges are updated, or “indexed,” to account for inflation.
One other thing that has changed is the indexing method used to adjust the tax brackets for inflation. Previously, the tax brackets were adjusted based on the standard Consumer Price Index. However, some economists believe that formula doesn’t fully account for changes in spending as prices rise. As a result, lawmakers adopted a “chained” CPI formula for post-2018 adjustments.
2019 Tax Brackets for Single/Married Filing Jointly
Tax Rate Taxable Income
(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 |
Chained indexing will generally result 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.
2019 Tax Brackets for Married Filing Separately/Head of Household
Tax Rate Taxable Income
(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 |
The “marriage penalty” also still exists. 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 Tax Cuts and Jobs Act, this happened in the four highest tax brackets. However, after tax reform, only the top bracket contains the marriage penalty trap. As a result, only couples with a combined taxable income over $612,350 are at risk when filing their 2019 tax return.
Finally, for comparison’s sake, here are the tax brackets for the 2018 tax year:
2018 Tax Brackets for Single/Married Filing Jointly
Tax Rate Taxable Income
(Single) Taxable Income
(Married Filing Jointly)
| 10% | Up to $9,525 | Up to$19,050 |
| 12% | $9,526 to $38,700 | $19,051 to $77,400 |
| 22% | $38,701 to $82,500 | $77,401 to $165,000 |
| 24% | $82,501 to $157,500 | $165,001 to $315,000 |
| 32% | $157,501 to $200,000 | $315,001 to $400,000 |
| 35% | $200,001 to $500,000 | $400,001 to $600,000 |
| 37% | Over $500,000 | Over $600,000 |
2018 Tax Brackets for Married Filing Separately/Head of Household
Tax Rate Taxable Income
(Married Filing Separately) Taxable Income
(Head of Household)
| 10% | Up to $9,525 | Up to $13,600 |
| 12% | $9,526 to $38,700 | $13,601 to $51,800 |
| 22% | $38,701 to $82,500 | $51,801 to $82,500 |
| 24% | $82,501 to $157,500 | $82,501 to $157,500 |
| 32% | $157,501 to $200,000 | $157,501 to $200,000 |
| 35% | $200,001 to $300,000 | $200,001 to $500,000 |
| 37% | Over $300,000 | Over $500,000 |
SOURCE: NASDAQ.com