The Internal Revenue Service (IRS) has announced the annual inflation adjustments for the tax year 2021, including tax rate schedules, tax tables and cost-of-living adjustments.

These are the numbers for the tax year 2021 beginning January 1, 2021. They are not the numbers and tables that you’ll use to prepare your 202o tax returns in 2021 (you’ll find them here). These are the numbers that you’ll use to prepare your 2021 tax returns in 2022.

If you aren’t expecting any significant changes in 2021, you can use the updated numbers to estimate your liability. If you plan to make more money or change your circumstances (for example, you’re getting married or starting a business), consider adjusting your withholding or tweaking your estimated tax payments. 

Tax Brackets and Tax Rates

There are still seven (7) tax rates in 2021. They are: 10%, 12%, 22%, 24%, 32%, 35% and 37% (there is also a zero rate). Here’s how those break out by filing status:

REF: https://www.forbes.com/sites/kellyphillipserb/2020/10/26/irs-releases-2021-tax-rates-standard-deduction-amounts-and-more/?sh=1c7a78f97b91