How tax brackets work
Federal income tax is charged in layers. Taxable income is cut into slices at the bracket lines, and each slice is taxed at its own rate. The first slice is taxed at 10% for everyone, whatever they earn. Your bracket is the rate on the top slice you reach, which is why it is also called your marginal rate.
Brackets apply to taxable income, not salary. The standard deduction for 2026 is $16,100 for a single filer, $32,200 for a married couple filing jointly and $24,150 for a head of household. If your itemized deductions are larger, they replace it.
A worked example
A single filer with $75,000 of income subtracts $16,100 and has $58,900 of taxable income. It falls across 3 brackets:
- $12,400 at 10%: $1,240
- $38,000 at 12%: $4,560
- $8,500 at 22%: $1,870
The tax is $7,670. The marginal rate is 22%, and the effective rate is 10.23% of income. A married couple filing jointly on twice the income, $150,000, pays $15,340, exactly twice as much, because the joint brackets and standard deduction are twice the single ones at this level.
The 2026 federal brackets
| Rate | Taxable income over | Up to |
|---|---|---|
| 10% | $0 | $12,400 |
| 12% | $12,400 | $50,400 |
| 22% | $50,400 | $105,700 |
| 24% | $105,700 | $201,775 |
| 32% | $201,775 | $256,225 |
| 35% | $256,225 | $640,600 |
| 37% | $640,600 | and above |
| Rate | Taxable income over | Up to |
|---|---|---|
| 10% | $0 | $24,800 |
| 12% | $24,800 | $100,800 |
| 22% | $100,800 | $211,400 |
| 24% | $211,400 | $403,550 |
| 32% | $403,550 | $512,450 |
| 35% | $512,450 | $768,700 |
| 37% | $768,700 | and above |
| Rate | Taxable income over | Up to |
|---|---|---|
| 10% | $0 | $17,700 |
| 12% | $17,700 | $67,450 |
| 22% | $67,450 | $105,700 |
| 24% | $105,700 | $201,750 |
| 32% | $201,750 | $256,200 |
| 35% | $256,200 | $640,600 |
| 37% | $640,600 | and above |
Brackets and your paycheck
Payroll uses the same brackets, spread over the pay periods of the year, so a raise or an overtime week is withheld at your marginal rate. Two kinds of tax sit on top of the bracket rate for each extra dollar of wages: Social Security and Medicare, 7.65% together until the wage base, and state income tax in most states. That combined figure is the real cost of earning one more dollar, and it is what the raise calculator works out.
Deductions save tax at the marginal rate too. A $1,000 traditional 401(k) or IRA contribution for someone in the 22% bracket cuts federal tax by $220. A credit is different: it comes off the tax itself, dollar for dollar, whatever your bracket.
The bracket lines rise with inflation each year, so a raise that only keeps up with prices does not push more of your income into a higher bracket. The lines shown here are for the 2026 tax year, filed in 2027.
What the inputs mean
- Income: wages and other income for the year, before the standard deduction.
- Filing status: the status on your return. Married filing separately uses the single brackets below the top.
- Itemized deductions: leave at zero to use the standard deduction.
Common mistakes
- Applying the bracket rate to all income. Only the top slice is taxed at that rate.
- Turning down a raise to stay in a lower bracket. It always leaves you better off on income tax.
- Forgetting payroll and state taxes. Social Security, Medicare and state tax add to the federal rate on each extra dollar.
Tax bracket questions
What tax bracket am I in on $75,000?
As a single filer with the standard deduction, taxable income is $58,900 and the top bracket it reaches is 22%. The tax is $7,670, an effective rate of 10.23% of income.
Does moving into a higher bracket mean I take home less?
No. Only the dollars above the bracket line are taxed at the higher rate. An extra $1,000 of income on $75,000 adds $220 of federal income tax, and the rest is yours.
Do capital gains use these brackets?
Short-term gains do: they are taxed as ordinary income. Long-term gains on assets held over a year and qualified dividends have their own lower rates, which this calculator does not cover.
What is the difference between marginal and effective tax rates?
The marginal rate is the rate on your next dollar of taxable income; the effective rate is total tax divided by income. On $250,000 a single filer's marginal rate is 32% but the effective rate is 20.52%, because the lower brackets still apply to the first dollars.
Sources
Rules checked . How we calculate.