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

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2020 Tax Brackets


No.  676
Nov.  2019

Amir  EI-Sibaie

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


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    For Single
Individuals, Taxable
   Income Over

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

    For Heads of
Households, Taxable
    Income Over

Editor, Rachel Shuster
Designer, Dan Carvajal

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

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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