What Your 2020 Tax Bill Depends On
How much you owe in taxes for 2020 comes down to taxable income, filing status, deductions, credits, and withholding. Your gross income minus adjustments gives you adjusted gross income, then subtract either the standard deduction or itemized deductions to reach taxable income. That number is what the tax brackets actually apply to.
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2020 Federal Tax Brackets and Rates
The IRS set seven brackets for 2020: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. Your bracket depends on filing status and taxable income. You do not pay the top rate on all your income; each portion is taxed at its own rate up to the threshold where it falls.
| Filing Status | 10% Bracket | 12% Bracket | 22% Bracket |
|---|---|---|---|
| Single | $0 – $9,875 | $9,876 – $40,125 | $40,126 – $85,525 |
| Married Filing Jointly | $0 – $19,750 | $19,751 – $80,250 | $80,251 – $171,050 |
| Head of Household | $0 – $14,100 | $14,101 – $53,700 | $53,701 – $85,500 |
Standard Deduction for 2020
The 2020 standard deduction was $12,400 for single filers, $24,800 for married filing jointly, and $18,650 for head of household. If your itemized deductions exceed these amounts, you may owe less tax by itemizing. Most taxpayers used the standard deduction because it was larger than their itemized total.
Credits That Reduce What You Owe
Credits reduce your tax bill dollar-for-dollar, unlike deductions, which only reduce taxable income. The Child Tax Credit, Earned Income Tax Credit, and Education Credits can substantially lower your liability. Refundable credits can also generate a refund even if your tax owed reaches zero.
Withholding and Estimated Payments
If too little was withheld from your paycheck or you skipped estimated quarterly payments, you may face a balance due plus potential underpayment penalties. The IRS provides a withholding calculator to help you see whether your 2020 payments were sufficient based on your actual income and credits.