New Tax Brackets Released: What Does this Mean for Your Taxes?

Tax season is coming up and many people are wondering what tax bracket they will be in this year. The IRS recently announced the new tax brackets for the 2020 tax year, to be filed in 2021. For tax brackets married filing jointly, these tax brackets can help you figure out how much tax you’ll owe on your income this year!

The lowest tax bracket is taxed at a rate of ten percent and includes taxable income up to $12,200.00 for single individuals. For married couples filing jointly with combined incomes under $24,400.00, they will pay a reduced tax rate of just 15%. This also applies to heads of household who have incomes between $18,350 and 24,400 dollars. Income over this amount will be taxed at 12% tax rates on the whole dollar amount above these limits of $1137. In addition to lower marginal tax rates in each new tax bracket compared to last year’s brackets, some taxpayers may benefit from an increased deduction of the tax credit for which they qualify.

The highest tax bracket is taxed at a rate of 37%. This tax bracket includes all income over $510,300 for single individuals and married couples who file jointly will be taxed on their entire combined incomes above this limit at 38% rates. Those in this tax bracket may also benefit from an increased deduction if their taxable income falls below a certain point due to deductions or credits that reduce your annual obligation by reducing your gross adjusted income before calculating taxes owed. Figuring out how much you owe in federal tax can seem daunting but these new 2020 tax brackets have made it easier than ever!

If you’re not sure if you should file jointly or separately, preparing the tax return both ways can help. Double-check your calculations and then compare the net refund or balance due from each method to see which is better for you. If you utilize TurboTax to prepare your return, they will perform the computations and suggest the filing status that would result in the greatest tax savings.

If you have three or more qualifying children, you can get up to $5,000. There are also other variables to consider, such as your earnings. The transportation fringe benefit, too, has seen substantial modifications. It is now worth $265, up to $5 from last year. The financial penalty for not having health insurance has increased significantly. The Tax Cuts and Jobs Act reduced the penalty to $0, which is a savings of $695 per year.

Don’t be concerned about understanding these tax laws. TurboTax Online will ask you simple questions and offer you the greatest tax filing status, deductions, and credits based on your answers. TurboTax will do the heavy tax computation, and it’s free to use! There is no obligation. You can start for free and pay when you’re done with your return.

You can connect live via one-way video to a TurboTax tax expert or CPA with an average of 12 years of experience to get your tax questions answered if you have concerns. Tax experts and CPAs are on hand in English and Spanish, and they can also review, sign, and file your return.

If tax season seems daunting, don’t worry! Tax brackets married filing jointly easier than ever and you’ll get the biggest tax refund guaranteed. Use the tools available to ensure that your tax return is accurate and complete. You can connect live via one-way video to a TurboTax tax expert or CPA with an average of 12 years of experience if needed for any questions about your tax situation.

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