CALCULATION OF THE EFFECTIVE FEDERAL TAX RATE (2021)

1 CALCULATION OF THE EFFECTIVE FEDERAL TAX RATE (2021). MARRIED FILING JOINTLY MARRIED FILING HEAD OF. SINGLE. QUALIFYING WIDOWER SEPARATELY HOUSEHOLD. TAXABLE MARGINAL FEDERAL EFFECTIVE MARGINAL FEDERAL EFFECTIVE MARGINAL FEDERAL EFFECTIVE MARGINAL FEDERAL EFFECTIVE . INCOME TAX RATE TAX TAX RATE TAX RATE TAX TAX RATE TAX RATE TAX TAX RATE TAX RATE TAX TAX RATE. $ - $ - $ - $ - $ - 1. This chart contains FEDERAL tax rates and their applicable tax $ 1,000 $ 100 $ 100 $ 100 $ 100 brackets. This chart is applicable only to the CALCULATION of $ 2,000 $ 200 $ 200 $ 200 $ 200 personal income taxes on income received in 2021. To obtain $ 3,000 $ 300 $ 300 $ 300 $ 300 tax payable at any given taxable income, simply match taxable $ 4,000 $ 400 $ 400 $ 400 $ 400 income with the filing status. The middle column shows how $ 5,000 $ 500 $ 500 $ 500 $ 500 much tax is owed, and the right column shows the EFFECTIVE tax $ 6,000 $ 600 $ 600 $ 600 $ 600 rate. These calculations assume that taxable income does not $ 7,000 $ 700 $ 700 $ 700 $ 700 include any long-term capital gains or qualified dividends, both $ 8,000 $ 800 $ 800 $ 800 $ 800 of which qualify for reduced tax rates.

2 $ 9,950 $ 995 $ 995 $ 995 $ 995 $ 10,000 $ 1,000 $ 1,001 $ 1,000 $ 1,001 2. A standard deduction is available to all taxpayers who do not $ 11,000 $ 1,100 $ 1,121 $ 1,100 $ 1,121 itemize their deductions. The 2021 standard deduction is $ 12,000 $ 1,200 $ 1,241 $ 1,200 $ 1,241 $ 13,000 $ 1,300 $ 1,361 $ 1,300 $ 1,361 $12,550 for single, $12,550 for married filing separately, $ 14,200 $ 1,420 $ 1,505 $ 1,420 $ 1,505 $18,880 for head of household, or $25,100 for married filing $ 15,000 $ 1,500 $ 1,601 $ 1,516 $ 1,601 jointly. $ 16,000 $ 1,600 $ 1,721 $ 1,636 $ 1,721 $ 17,000 $ 1,700 $ 1,841 $ 1,756 $ 1,841 3. For tax years 2021 through 2025, itemized deductions for $ 18,000 $ 1,800 $ 1,961 $ 1,876 $ 1,961 state and local property taxes, state income taxes, and sales $ 19,900 $ 1,990 $ 2,189 $ 2,104 $ 2,189 taxes are limited to $10,000. All miscellaneous itemized $ 22,000 $ 2,242 $ 2,441 $ 2,356 $ 2,441 deductions for that period have been suspended. $ 24,000 $ 2,482 $ 2,681 $ 2,596 $ 2,681 $ 26,000 $ 2,722 $ 2,921 $ 2,836 $ 2,921 4.

3 The Tax Jobs and Cuts Act of 2017 suspended personal $ 28,000 $ 2,962 $ 3,161 $ 3,076 $ 3,161 exemptions for tax years 2021 through 2025. $ 30,000 $ 3,202 $ 3,401 $ 3,316 $ 3,401 $ 32,000 $ 3,442 $ 3,641 $ 3,556 $ 3,641 5. A taxpayer is liable for an additional percent Medicare $ 34,000 $ 3,682 $ 3,881 $ 3,796 $ 3,881 Tax if their wages, compensation, or self-employment income $ 36,000 $ 3,922 $ 4,121 $ 4,036 $ 4,121 exceeds $250,000 for married filing jointly; $125,000 for $ 38,000 $ 4,162 $ 4,361 $ 4,276 $ 4,361 married filing separately; and $200,000 for single/head of $ 40,525 $ 4,465 $ 4,664 $ 4,579 $ 4,664 household/qualifying widower. $ 42,000 $ 4,642 $ 4,989 $ 4,756 $ 4,989 $ 44,000 $ 4,882 $ 5,429 $ 4,996 $ 5,429 6. A child tax credit is available for taxpayers with qualifying $ 46,000 $ 5,122 $ 5,869 $ 5,236 $ 5,869 children under the age of 17. The credit is $2,000 per qualifying $ 48,000 $ 5,362 $ 6,309 $ 5,476 $ 6,309 $ 50,000 $ 5,602 $ 6,749 $ 5,716 $ 6,749 child and phases out at the rate of $50 for every $1,000 of $ 52,000 $ 5,842 $ 7,189 $ 5,956 $ 7,189 modified adjusted gross income, or fraction thereof, that $ 54,200 $ 6,106 $ 7,673 $ 6,220 $ 7,673 exceeds $400,000 for married filing jointly and $200,000 for all $ 56,000 $ 6,322 $ 8,069 $ 6,616 $ 8,069 others.

4 $ 58,000 $ 6,562 $ 8,509 $ 7,056 $ 8,509 $ 60,000 $ 6,802 $ 8,949 $ 7,496 $ 8,949 $ 62,000 $ 7,042 $ 9,389 $ 7,936 $ 9,389 $ 64,000 $ 7,282 $ 9,829 $ 8,376 $ 9,829 $ 66,000 $ 7,522 $ 10,269 $ 8,816 $ 10,269 $ 68,000 $ 7,762 $ 10,709 $ 9,256 $ 10,709 Vic Alexander, CPA, ABV, CFF. $ 70,000 $ 8,002 $ 11,149 $ 9,696 $ 11,149 Chief Manager, KraftCPAs PLLC. $ 72,000 $ 8,242 $ 11,589 $ 10,136 $ 11,589 (615) 782-4241 $ 74,000 $ 8,482 $ 12,029 $ 10,576 $ 12,029 $ 76,000 $ 8,722 $ 12,469 $ 11,016 $ 12,469 CALCULATION OF THE EFFECTIVE FEDERAL TAX RATE (2021). MARRIED FILING JOINTLY MARRIED FILING HEAD OF. SINGLE. QUALIFYING WIDOWER SEPARATELY HOUSEHOLD. TAXABLE MARGINAL FEDERAL EFFECTIVE MARGINAL FEDERAL EFFECTIVE MARGINAL FEDERAL EFFECTIVE MARGINAL FEDERAL EFFECTIVE . INCOME TAX RATE TAX TAX RATE TAX RATE TAX TAX RATE TAX RATE TAX TAX RATE TAX RATE TAX TAX RATE. $ 78,000 $ 8,962 $ 12,909 $ 11,456 $ 12,909 7. A non-refundable credit of $500 is available for a dependent $ 80,000 $ 9,202 $ 13,349 $ 11,896 $ 13,349 that is not a qualifying child.

5 This credit would apply to a child $ 81,050 $ 9,328 $ 13,580 $ 12,127 $ 13,580 under age 19, a full-time student under age 24, or a disabled $ 83,000 $ 9,757 $ 14,009 $ 12,556 $ 14,009 child of any age. $ 86,350 $ 10,494 $ 14,746 $ 13,293 $ 14,746 $ 86,375 $ 10,500 $ 14,751 $ 13,299 $ 14,751 8. For 2021, Social Security Tax is percent of the first $ 90,000 $ 11,297 $ 15,621 $ 14,169 $ 15,621 $142,800 of wages. The Medicare Tax is percent with no $ 95,000 $ 12,397 $ 16,821 $ 15,369 $ 16,821 limitation. Self-employment tax is double the Social Security $ 100,000 $ 13,497 $ 18,021 $ 16,569 $ 18,021 and Medicare tax rates noted above with the same income $ 110,000 $ 15,697 $ 20,421 $ 18,969 $ 20,421 limitations. The tax applies to percent of an individual's $ 120,000 $ 17,897 $ 22,821 $ 21,369 $ 22,821 self-employment income. If that amount is less than $142,800, $ 130,000 $ 20,097 $ 25,221 $ 23,769 $ 25,221 the tax is percent. If that amount is greater than $142,800, $ 140,000 $ 22,297 $ 27,621 $ 26,169 $ 27,621 $ 150,000 $ 24,497 $ 30,021 $ 28,569 $ 30,021 the tax is $21,848 plus percent of the amount above $ 160,000 $ 26,697 $ 32,421 $ 30,969 $ 32,421 $142,800.

6 $ 164,900 $ 27,775 $ 33,597 $ 32,145 $ 33,597 $ 164,925 $ 27,781 $ 33,603 $ 32,153 $ 33,603 9. High-income taxpayers have an additional percent tax $ 170,000 $ 28,897 $ 35,227 $ 33,777 $ 35,227 levied on net investment income. This Net Investment Income $ 172,750 $ 29,502 $ 36,107 $ 34,657 $ 36,107 Tax will be applicable to married taxpayers filing jointly with net $ 180,000 $ 31,242 $ 38,427 $ 36,977 $ 38,427 investment income and modified Adjusted Gross Income (AGI). $ 190,000 $ 33,642 $ 41,627 $ 40,177 $ 41,627 in excess of $250,000; married taxpayers filing separately with $ 200,000 $ 36,042 $ 44,827 $ 43,377 $ 44,827 net investment income and modified AGI in excess of $125,000;. $ 209,400 $ 38,298 $ 47,835 $ 46,385 $ 47,835 head of household/single taxpayers with net investment $ 209,425 $ 38,304 $ 47,843 $ 46,394 $ 47,843 income and modified AGI in excess of $200,000; and qualifying $ 220,000 $ 40,842 $ 51,544 $ 50,095 $ 51,544 widower taxpayers with net investment income and modified $ 240,000 $ 45,642 $ 58,544 $ 57,095 $ 58,544 AGI in excess of $250,000.

7 $ 260,000 $ 50,442 $ 65,544 $ 64,095 $ 65,544 $ 280,000 $ 55,242 $ 72,544 $ 71,095 $ 72,544 10. For tax years 2021 through 2025, taxpayers that have $ 300,000 $ 60,042 $ 79,544 $ 78,095 $ 79,544 domestic qualified business income from a pass-through entity $ 314,150 $ 63,438 $ 84,497 $ 83,048 $ 84,497 (sole proprietorships, partnerships, limited liability companies $ 329,850 $ 67,206 $ 90,306 $ 88,543 $ 89,992 and S corporations) are entitled to a deduction that is a $ 340,000 $ 70,454 $ 94,061 $ 92,095 $ 93,544 maximum of 20 percent of such income. Many qualifications $ 360,000 $ 76,854 $ 101,461 $ 99,095 $ 100,544 and limitations apply to this deduction. It is a deduction from $ 380,000 $ 83,254 $ 108,861 $ 106,095 $ 107,544 $ 400,000 $ 89,654 $ 116,261 $ 113,095 $ 114,544 AGI, and the taxpayer does not need to itemize in order to $ 418,850 $ 95,686 $ 123,236 $ 119,693 $ 121,142 qualify to take the deduction. $ 420,000 $ 96,089 $ 123,661 $ 120,095 $ 121,544 $ 440,000 $ 103,089 $ 131,061 $ 127,095 $ 128,544 11.

8 Two rounds of recovery rebate credit advance payments $ 460,000 $ 110,089 $ 138,461 $ 134,095 $ 135,544 have been paid out to eligible individuals based on their 2018. $ 480,000 $ 117,089 $ 145,861 $ 141,095 $ 142,544 or 2019 tax returns. Additional credit is available to individuals $ 500,000 $ 124,089 $ 153,261 $ 148,095 $ 149,544 that qualify for greater amount of credit using their 2020 tax $ 523,600 $ 132,349 $ 161,993 $ 156,355 $ 157,804 return. $ 550,000 $ 141,589 $ 171,761 $ 166,123 $ 167,572 $ 600,000 $ 159,089 $ 190,261 $ 184,623 $ 186,072 $ 628,300 $ 168,994 $ 200,732 $ 195,094 $ 196,543 Vic Alexander, CPA, ABV, CFF. $ 700,000 $ 195,523 $ 227,261 $ 221,623 $ 223,072 Chief Manager, KraftCPAs PLLC. $ 800,000 $ 232,523 $ 264,261 $ 258,623 $ 260,072 (615) 782-4241 $ 900,000 $ 269,523 $ 301,261 $ 295,623 $ 297,072 $ 1,000,000 $ 306,523 $ 338,261 $ 332,623 $ 334,072