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1 Amir El-Sibaie, 2020 Tax Brackets 1 (2019)

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2020 Tax Brackets


FISCAL

FACT
No.  676
Nov.  2019


Amir  EI-Sibaie
Economist


On  a yearly basis the IRS adjusts more  than 40  tax provisions for inflation. This is
done  to prevent  what  is called bracket creep, when people  are pushed   into higher
income  tax brackets  or have  reduced  value from  credits and deductions  due  to
inflation, instead of any increase in real income.


The  IRS used to use  the Consumer   Price Index  (CPI) to calculate the past year's
inflation.' However,  with the Tax Cuts  and Jobs  Act of 2017, the IRS will now  use
the Chained   Consumer   Price Index (C-CPI) to adjust income   thresholds, deduction
amounts,  and  credit values accordingly.2



Income Tax Brackets and Rates


In 2020, the  income  limits for all tax brackets and all filers will be adjusted for
inflation and will be as follows (Table 1). The top marginal income  tax rate of 37
percent  will hit taxpayers with taxable income  of $518,400   and  higher for single
filers and $622,050  and  higher for married  couples filing jointly.


TABLE   1.
Tax   Brackets and Rates, 2020


Rate
10%
12%
22%


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    For Single
Individuals, Taxable
   Income Over
           $0
        $9,875
      $40,125


24%                  $85,525
32%                $163,300
35%                 $207,350
37%                $518,400
Source: Internal Revenue Service


For Married Individuals
  Filing Joint Returns,
  Taxable Income Over
             $0
        $19,750
        $80,250
        $171,050
        $326,600
        $414,700
        $622,050


    For Heads of
Households, Taxable
    Income Over
            $0
       $14,100
       $53,700
       $85,500
       $163,300
       $207,350
       $518,400


Editor, Rachel Shuster
Designer, Dan Carvajal


Tax Foundation
1325 G Street, NW, Suite 950
Washington, DC 20005
202.464.6200


1   Internal Revenue Service, Revenue Proc. 2019-44,' https://www.irs.gov/pub/irs-drop/rp-19-44.pdf.
2   Robert Cage, John Greenlees, and Patrick Jackman, Introducing the Chained Consumer Price Index,' U.S. Bureau of Labor
    Statistics, May 2003, https://www.bls.gov/cpi/additional-resources/chained-cpi-introduction.pdf.


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