Curiosity from a financial savings account is taxed at your earned revenue tax price for the yr. Because of this the tax quantity you owe on curiosity for a given yr will rely in your complete taxable revenue, the present tax bracket you fall into, and the way a lot you earned in curiosity.

Listed below are the marginal tax brackets for the upcoming 2021 revenue yr:

 

Fee Single Married Submitting Collectively Head of Family
10% As much as $9,950 As much as $19,900 As much as $14,200
12% $9,951 to $40,525 $19,901 to $81,050 $14,201 to $54,200
22% $40,526 to $86,375 $81,051 to $172,750 $54,201 to $86,350
24% $86,376 to $164,925 $172,751 to $329,850 $86,351 to $164,900
32% $164,926 to $209,425 $329,851 to $418,850 $164,901 to $209,400
35% $209,426 to $523,600 $418,851 to $628,300 $209,401 to $523,600
37% $523,601 or extra $628,301 or extra $523,601 or extra

Supply: Inner Income Service

As an example, let’s say as a single particular person, your complete taxable revenue in 2021 is $60,000. That places you within the 22% tax bracket, which means that along with paying 22% in your revenue, additionally, you will pay 22% of your earned curiosity in taxes. Say you earned $100 in curiosity on a financial savings account that yr. In case your tax price is 22%, you’ll owe $22 in taxes from that revenue.

Needless to say the variables that decide your tax bracket can change from yr to yr. In case your regular tax bracket modifications, the quantity of tax you pay on curiosity revenue modifications together with it.

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