Excel VLOOKUP for Tax Brackets Year 2021 with Examples

Posted on: 12/01/2021

Use Excel to calculate your tax liability using VLOOKUP. The Excel file is in the blog post. Tax brackets show you the tax rate you will pay on each portion of your income. For example, if you are single in 2021 and make $86,375, you are in the 22% tax bracket. You do not pay $22% on your taxable income. Twenty-two percent of $86,375 is $19,002.50.

We have a progressive tax system in the United States. You would pay 10% tax on the first 9,950 you make. You will pay 12% on the next $30,575, and you will only pay 22% on the remaining $45,850. That totals $14,751. That is a huge difference from $19,002. We will use VLOOKUP in this Excel exercise to figure out your taxable income for 2021.

YouTube video

Steps to figure out income tax due

Add the header rows Income, Rate, and Cummultative Tax.
Fill in the numbers. The numbers come from the IRS, but you can find them on many websites. Make sure to put in your correct filing status numbers. Single and Married Filing a Joint Return have different numbers as an example. I'm using Married Filing a Joint Return in the example below.

In columns E and F, put the Income, Tax, Marginal Tax Rate and Effective Rate.
F2 is your taxable income, not gross income, not adjusted gross income. Taxable income is after you take the Standard deduction or itemized deduction.
Cell F3 is the VLOOKUP Function =VLOOKUP(F2,A3:C9,3,TRUE)+(F2-VLOOKUP(F2,A3:C9,1,TRUE))*(VLOOKUP(F2,A3:C9,2,TRUE))
Cell F4 calculates the Marginal Tax Rate also using the VLOOKUP function =VLOOKUP(F2,A3:C9,2,TRUE)
The Effective Tax rate in cell F5 is a formula =F3/F2

Download example file: VLOOKUP Tax Brackets 2021

2021_tax_brackets_vlookup_Chris_Menard (Size: 11.6KB)

Recent Microsoft Teams articles

Copilot in Teams Control Access: Manage Recordings, Transcriptions & AI Insights

If you're a Microsoft Teams user with Copilot, exciting new features have been rolled out. You can now manage who has access to meeting recordings, transcriptions, and AI-generated insights as the meeting organizer. This enhances security and privacy in your Teams meetings.

Teams Calls vs. Meetings: What is the Difference?

Understanding the distinction between a Teams call and a Teams meeting is crucial for effective communication within an organization. Both have unique features and functionalities that cater to different needs. Let’s dive into the specifics of Teams calls and meetings.

Teams Meetings - Move Presenter Toolbar When Sharing

Move the Presenter toolbar when sharing your screen in a Teams Meeting.

NEW feature: Teams - Send Individual Channel Meeting Invites to Members

Teams Channel Meetings - Send Invites to members - Now, in meetings for channel members, you can control when users get emails with the meeting invite.

Recent Microsoft Excel articles

Social Security - Breakeven point in Years using Excel

Calculate SSA breakeven in years. The break-even point represents when the cumulative benefits even out. Comparing 62 to 67, you have been collecting money for 60 months.

Creating a Column Chart using S&P 500 data with Positive and Negative Colors in Excel

Imagine a scenario where you're analyzing the S&P 500 index's performance over several years. You'll likely encounter both positive and negative percentage changes. Distinguishing between these with just numbers can be dry and difficult to grasp immediately.

Optimizing Excel Formulas with Copilot: A Comprehensive Guide

Excel has always been a powerhouse for managing data, and with the introduction of Copilot, it's become even more powerful. Copilot

Five Methods for Creating Running Totals in Excel

Excel is a powerful tool that offers various features to manipulate and analyze data efficiently. One of the useful functionalities it provides is the ability to create running totals, which can be essential for tracking cumulative sums over a period.

Chris Menard

Chris Menard is a certified Microsoft Trainer (MCT) and works as a full-time Trainer at BakerHostetler - one of the largest law firms in the US. He runs a YouTube channel with 900+ technology videos that cover various tools such as Excel, Word, Zoom, Teams, Gmail, Google Calendar, and Outlook. To date, the channel has helped over 20 million viewers. Menard also does 2 to 3 public speaking events every year, presenting at the Administrative Professional Conference (APC), the EA Ignite Conference, the Support Staff Conference, the University of Georgia, and CPA conferences. You can connect with him on LinkedIn at https://chrismenardtraining.com/linkedin or watch his videos on YouTube at https://chrismenardtraining.com/youtube.