How is your income distributed across tax brackets?
I previously made a graphical visualization of income and marginal tax rates to show how tax brackets work. That graph tried to show alot of info on the same graph, i.e. the breakdown of income tax brackets for incomes ranging from $10,000 to $3,000,000. It was nice looking, but I think several people were confused about how to read the graph. This Sankey graph is a more detailed look at the tax breakdown for one specific income. You can enter your (or any other) profile and see how taxes are distributed across the different brackets. It can help (as the other tried) to better understand marginal and average tax rates. This tool only looks at US Federal Income taxes and ignores state, local and Social Security/Medicare taxes.
– Use this button to generate a URL that you can share a specific set of inputs and graphs. Just copy the URL in the address bar at the top of your browser (after pressing the button).
- Select filing status: Single, Married Filing Jointly or Head of Household. For more info on these filing categories see the IRS website
- Enter your regular income and capital gains income. Regular income is wage or employment income and is taxed at a higher rate than capital gains income. Capital gains income is typically investment income from the sale of stocks or dividends and taxed at a lower rate than regular income.
- Move your cursor or click on the Sankey graph to select a specific link. This will give you more information about how income in a specific tax bracket is being taxed.
**Click Here to view other financial-related tools and data visualizations from engaging-data**
As seen with the marginal rates graph, there is a big difference in how regular income and capital gains are taxed. Capital gains are taxed at a lower rate and generally have larger bracket sizes. Generally, wealthier households earn a greater fraction of their income from capital gains and as a result of the lower tax rates on capital gains, these household pay a lower effective tax rate than those making an order of magnitude less in overall income.
2018 Tax Brackets
Here are two tables that lists the marginal tax brackets in the United States in 2018 that form the basis of the calculations in the calculator. 2019’s numbers are listed below.
| Rate | Single Taxable Income Over |
Married Filing Joint Taxable Income Over |
Heads of Households Taxable Income Over |
|---|---|---|---|
| 10% | $0 | $0 | $0 |
| 12% | $9,525 | $19,050 | $13,600 |
| 22% | $38,700 | $77,400 | $51,800 |
| 24% | $82,500 | $165,000 | $82,500 |
| 32% | $157,500 | $315,000 | $157,500 |
| 35% | $200,000 | $400,000 | $200,000 |
| 37% | $500,000 | $600,000 | $500,000 |
You can see that tax rates are much lower for capital gains in the table below than for regular income (table above).
| Single Capital Gains Over |
Married Filing Jointly Capital Gains Over |
Heads of Households Capital Gains Over |
|
|---|---|---|---|
| 0% | $0 | $0 | $0 |
| 15% | $38,700 | $77,400 | $51,850 |
| 20% | $426,700 | $480,050 | $453,350 |
2019 Tax Brackets
Here are the numbers for 2019:
| Rate | Single Taxable Income Over |
Married Filing Joint Taxable Income Over |
Heads of Households Taxable Income Over |
|---|---|---|---|
| 10% | $0 | $0 | $0 |
| 12% | $9,700 | $19,400 | $13,850 |
| 22% | $39,475 | $78,950 | $52,850 |
| 24% | $84,200 | $168,400 | $84,200 |
| 32% | $160,725 | $321,450 | $160,700 |
| 35% | $204,100 | $408,200 | $204,100 |
| 37% | $510,300 | $612,350 | $510,300 |
You can see that tax rates are much lower for capital gains in the table below than for regular income (table above).
| Single Capital Gains Over |
Married Filing Jointly Capital Gains Over |
Heads of Households Capital Gains Over |
|
|---|---|---|---|
| 0% | $0 | $0 | $0 |
| 15% | $39,375 | $78,750 | $52,750 |
| 20% | $434,550 | $488,850 | $461,700 |
2020 Tax Brackets
Here are the numbers for 2020:
| Rate | Single Taxable Income Over |
Married Filing Joint Taxable Income Over |
Heads of Households Taxable Income Over |
|---|---|---|---|
| 10% | $0 | $0 | $0 |
| 12% | $9,875 | $19,750 | $14,100 |
| 22% | $40,125 | $80,250 | $53,700 |
| 24% | $85,525 | $171,050 | $85,500 |
| 32% | $163,300 | $326,600 | $163,300 |
| 35% | $207,350 | $414,700 | $207,350 |
| 37% | $518,400 | $622,050 | $518,400 |
You can see that tax rates are much lower for capital gains in the table below than for regular income (table above).
| Single Capital Gains Over |
Married Filing Jointly Capital Gains Over |
Heads of Households Capital Gains Over |
|
|---|---|---|---|
| 0% | $0 | $0 | $0 |
| 15% | $40,000 | $80,000 | $53,600 |
| 20% | $441,450 | $496,600 | $469,050 |
2021 Tax Brackets
Here are the numbers for 2021:
| Rate | Single Taxable Income Over |
Married Filing Joint Taxable Income Over |
Heads of Households Taxable Income Over |
|---|---|---|---|
| 10% | $0 | $0 | $0 |
| 12% | $9,950 | $19,900 | $14,200 |
| 22% | $40,525 | $81,050 | $54,200 |
| 24% | $86,375 | $172,750 | $86,350 |
| 32% | $164,925 | $329,850 | $164,900 |
| 35% | $209,425 | $418,850 | $209,400 |
| 37% | $523,600 | $628,300 | $523,600 |
You can see that tax rates are much lower for capital gains in the table below than for regular income (table above).
| Single Capital Gains Over |
Married Filing Jointly Capital Gains Over |
Heads of Households Capital Gains Over |
|
|---|---|---|---|
| 0% | $0 | $0 | $0 |
| 15% | $40,400 | $80,800 | $54,100 |
| 20% | $445,850 | $501,600 | $473,750 |
- If you are single, all of your regular taxable income between 0 and $9,525 is taxed at a 10% rate. This means that your all of your gross income below $12,000 is not taxed and your gross income between $12,000 and $21,525 is taxed at 10%.
- If you have more income, you move up a marginal tax bracket. Any taxable income in excess of $9,525 but below $38,700 will be taxed at the 12% rate. It is important to note that not all of your income is taxed at the marginal rate, just the income between these amounts.
- Income between $38,700 and $82,500 is taxed at 24% and so on until you have income over $500,000 and are in the 37% marginal tax rate . . .
- Thus, different parts of your income are taxed at different rates and you can calculate an average or effective rate (which is shown in the summary table).
- Capital gains income complicates things slightly as it is taxed after regular income. Thus any amount of capital gains taxes you make are taxed at a rate that corresponds to starting after you regular income. If you made $100,000 in regular income, and only $100 in capital gains income, that $100 dollars would be taxed at the 15% rate and not at the 0% rate, because the $100,000 in regular income pushes you into the 2nd marginal tax bracket for capital gains (between $38,700 and $426,700).
Data and Tools:
Tax brackets and rates were obtained from the IRS website and calculations were made using javascript and code modified from the Sankeymatic plotting website.
27 Comments »
27 Responses to Understanding Tax Brackets: Interactive Income Tax Visualization and Calculator
By far the best tool I have found for visualizing how income is distrubuted across the various tax brackets. Thanks so much for making this tool available.
Thank you so much! You just saved our marriage!
Chris – first, I wanted to thank you. You’re amazing. I have NEVER understood how LTCG brackets work until now!! I also didn’t understand the interaction between the standard deduction and all other income. Tax might as well be Greek to me.
Like others, I’d also suggest including NIIT in the calculation — but I guess the reason you don’t do it is it may not always be triggered depending upon MAGI threshold, etc., so maybe it could be done a little more simply by adding a “checkbox” that adds the 3.8% to the LTCG to be checked “if NIIT applies to your LTCG”? It would just be helpful for those of us who are always adding another 3.8% ….
Lastly, I am HOH and when I “generate a link” it defaults to “single” … just thought you should know that too.
But again, thank you for all you do to help us who need to SEE things to understand them! You’re a lifesaver.
This is the best tax visualization out there to run out any scenarios you have for tax planning. I have used it monthly for a year now to self-manage my taxes and avoid have to constantly update a tax accountant. I hope you keep it going in the future with updated tax tables. If possible it would be great to add the NII tax part. Great work Chris!
I itemize versus taking the standard deduction. If I take my income and split it into preferred tax rates such as LTCP and the remainder to be taxed at ordinary income, delete from the ordinary income total the amount my itemized deductions exceed the standard deduction should that give me the correct taxes?
Hi there, I would love it if you update with the 2023 tax brackets. I use this page a lot for my personal retirement planning. The visual illustration of how your income is taxed has been very helpful for me. Thank you very much for creating this page and sharing it with the rest of us.
Thanks for your comments and I’ve updated it for 2023 tax brackets.
Thanks for the update. This is my favorite tax visualization tool.
One small issue: the result of using the “generate URL” button always defaults to the 2022 year. Can it be changed to specify the year as selected in the Tax Year drop down?
I just added the year to the URL so it should now show the correct year.
As posted several times this really needs the NIIT 3.8% tax added as well above $250,000.
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Seems to be missing Net Investment Income (3.8% tax on high capital gains.)
Great tool. Would love to see the option to enter our own deduction value.
I’m not sure if I’m understanding this. From the IRS website, it sounds like only the upper brackets differ for different filing statuses (married vs single). however the first 80k is taxed at 0%, independent of the filing status. However your calculations seem to assume that this is 40k for those who file single (agreeing with everything else I’m finding, aside from the IRS page). What am I misunderstanding from the following sentence from the IRS?
Source, https://www.irs.gov/taxtopics/tc409:
“A capital gain rate of 15% applies if your taxable income is $80,000 or more but less than $441,450 for single; $496,600 for married filing jointly or qualifying widow(er); $469,050 for head of household, or $248,300 for married filing separately.”
Hi Chris
I love this tool! Would you consider adding in dependents? I can do the math myself, but the visualization would be cool with that function!
This is great! Would love to see the state taxes in the visualization as well!
Minor correction: The standard deduction for single filers in 2021 is off by $50. Should be $12,550 (noticed when I got different results from my own spreadsheet).
Thanks for the excellent free tools!
I’ve been mentally visualizing this for a while and wanted to create my own tool, but finally found this one. Thanks, it’s basically perfect for sharing with friends to clarify the concepts.
It might save a few accidents when using this for rough pre-planning by explicitly labeling “LT capital gains”. Spinner arrows (and another field for amount to in/decrement by, e.g., 100, 1000) on the regular and LT CG income text fields would also be particularly handy in demonstrating what-if scenarios.
I think this calculator is great. If the NII tax was added in, that would make it truly exceptional.
This is a really great tool and I used it with my teenage son to show how tax brackets work and how salary vs CG affects things.
As someone already pointed out, I think it’s missing NIIT
This is a super helpful tool. I noticed that the 32% tax bracket is missing for single filers for 2021. Thanks!
Thanks Paige, I had a typo in the tax thresholds. Thanks for catching it. It should be fixed now.
This is fantastic, a great use of the Sankey!
Visualizing the data and impact is an amazing way to convey the message. Appreciate all the tools and insights.
I really like this tool as a way to visualize income & capital gains taxes. I also appreciate that you seem to keep updating it with each new year’s tax brackets.
One thing I did however notice is that it doesn’t account for the 3.8% Medicare Surtax (NIIT) applied when net investment income (MAGI) is over $200,000 for single and $250,000 for married filing jointly. This in effect creates four capital gains tax rates/brackets (0%, 15%, 18.8%, and 23.8%). Kitces.com has a great article talking about harvesting capital gains vs roth conversions where he outlines the various brackets in more detail.
While maybe technically considered a Medicare Tax instead of an Income Tax, it would be nice to be able to toggle weather or not the snakey graph included it or not.
Kitces article mentioned above:
https://www.kitces.com/blog/navigating-income-harvesting-strategies-harvesting-0-capital-gains-vs-partial-roth-conversions/
Great Tool. One comment. I can’t see that it calculated the Net Investment Income Tax for higher level incomes. I know that does complicate things a little, but it would be a nice feature to add. Thanks!
Maybe I’m just dense but where are interest and dividends reported and is Soc. Security just part of wages (taxable portion)?
Minor correction: The qualified dividend / long-term capital gain tax brackets were decoupled from the ordinary income tax brackets in the TCJA. The QD/LTCG 15% tax bracket starts at $38,600 / $77,200 in 2018, not the same $38,700 / $77,400 that marks the 22% marginal rate on ordinary income.