What Are Tax Brackets? How They Work and What They Mean for Your Taxes
Tax brackets are the income ranges that determine the rate of federal income tax you pay on each slice of your income.
The U.S. has seven federal brackets for both 2025 and 2026 — 10%, 12%, 22%, 24%, 32%, 35% and 37% — and only the income that falls inside each range is taxed at that bracket's rate, not your whole paycheck.
Key Takeaways
Seven brackets, two rate years. Federal rates run from 10% to 37% for both the 2025 and 2026 tax years — the rates haven't changed, but the income ranges have.
Only part of your income hits the top rate. Moving into a higher bracket taxes just the income inside that bracket, so a raise never lowers your take-home pay.
Brackets depend on filing status. Single, married filing jointly, married filing separately and head of household each use different income ranges.
Your taxable income is what counts. Start with gross income, then subtract the standard deduction — $15,750 single for 2025 and $16,100 for 2026 — or your itemized deductions.
Marginal is not the same as effective. Your marginal rate is the rate on your last dollar; your effective rate is the average across all your income and is usually lower.
Summary generated by AI, verified by MoneyLion editors
What Are Tax Brackets?
Tax brackets are income ranges, and each range has its own tax rate. As your taxable income rises, the additional income moves into higher brackets and is taxed at higher rates. The United States uses a progressive system, which the IRS applies rate by rate rather than taxing all of your income at one flat percentage.
A common misconception is that landing in a higher bracket taxes everything you earn at that higher rate. In reality, only the income inside each bracket is taxed at that bracket's rate.
Tax rate | Description |
|---|---|
10% | Lowest tax bracket |
12% | Lower-middle income |
22% | Moderate income |
24% | Upper-middle income |
32% | Higher income |
35% | High income |
37% | Highest federal bracket |
How Do Tax Brackets Work?
Tax brackets apply to portions of your income, not the whole amount. Say you're a single filer with $60,000 in taxable income in 2026. You don't pay 22% on all $60,000. You pay 10% on the first $12,400, 12% on the income from $12,401 to $50,400, and 22% only on the slice above $50,400.
That layered approach is why your average, or effective, tax rate ends up lower than the top bracket you reach.
2026 Federal Tax Brackets
These brackets apply to income earned in 2026, which most people file in early 2027.
Single Filers:
Tax rate | Taxable income |
|---|---|
10% | $0 to $12,400 |
12% | $12,401 to $50,400 |
22% | $50,401 to $105,700 |
24% | $105,701 to $201,775 |
32% | $201,776 to $256,225 |
35% | $256,226 to $640,600 |
37% | Over $640,600 |
Married Filing Jointly:
Tax rate | Taxable income |
|---|---|
10% | $0 to $24,800 |
12% | $24,801 to $100,800 |
22% | $100,801 to $211,400 |
24% | $211,401 to $403,550 |
32% | $403,551 to $512,450 |
35% | $512,451 to $768,700 |
37% | Over $768,700 |
Head of Household:
Tax rate | Taxable income |
|---|---|
10% | $0 to $17,700 |
12% | $17,701 to $67,450 |
22% | $67,451 to $105,700 |
24% | $105,701 to $201,750 |
32% | $201,751 to $256,200 |
35% | $256,201 to $640,600 |
37% | Over $640,600 |
Married Filing Separately:
Tax rate | Taxable income |
|---|---|
10% | $0 to $12,400 |
12% | $12,401 to $50,400 |
22% | $50,401 to $105,700 |
24% | $105,701 to $201,775 |
32% | $201,776 to $256,225 |
35% | $256,226 to $384,350 |
37% | Over $384,350 |
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2025 Federal Tax Brackets
If you're checking the return you filed in spring 2026, use these 2025 ranges. The rates are identical to 2026, but the income thresholds are slightly lower.
Single Filers:
Tax rate | Taxable income |
|---|---|
10% | $0 to $11,925 |
12% | $11,926 to $48,475 |
22% | $48,476 to $103,350 |
24% | $103,351 to $197,300 |
32% | $197,301 to $250,525 |
35% | $250,526 to $626,350 |
37% | Over $626,350 |
Married Filing Jointly:
Tax rate | Taxable income |
|---|---|
10% | $0 to $23,850 |
12% | $23,851 to $96,950 |
22% | $96,951 to $206,700 |
24% | $206,701 to $394,600 |
32% | $394,601 to $501,050 |
35% | $501,051 to $751,600 |
37% | Over $751,600 |
Head of Household:
Tax rate | Taxable income |
|---|---|
10% | $0 to $17,000 |
12% | $17,001 to $64,850 |
22% | $64,851 to $103,350 |
24% | $103,351 to $197,300 |
32% | $197,301 to $250,500 |
35% | $250,501 to $626,350 |
37% | Over $626,350 |
Married Filing Separately:
Tax rate | Taxable income |
|---|---|
10% | $0 to $11,925 |
12% | $11,926 to $48,475 |
22% | $48,476 to $103,350 |
24% | $103,351 to $197,300 |
32% | $197,301 to $250,525 |
35% | $250,526 to $375,800 |
37% | Over $375,800 |
The IRS adjusts these ranges every year for inflation to help prevent "bracket creep," where rising wages alone push you into a higher bracket. For more detail on the latest figures, see MoneyLion's guide to the new IRS tax brackets for 2026.
Marginal Tax Rate vs. Effective Tax Rate
Two terms come up constantly when people talk about brackets.
Marginal tax rate: This is the rate applied to your last dollar of income. If your top bracket is 22%, your next dollar of income may be taxed at 22%.
Effective tax rate: This is the average rate you actually pay across all your taxable income. Because your income is spread across several brackets, your effective rate is usually lower than your marginal rate.
How Do You Find Your Tax Bracket?
Use these three steps to match your income to a bracket:
Add up your gross income. Include wages, self-employment income, investment earnings and other taxable income.
Subtract your deductions. Most people take the standard deduction — $15,750 for single filers in 2025 and $16,100 in 2026 — though you can itemize instead if that lowers your taxable income more.
Match your taxable income to the table. Find the range your taxable income falls into for your filing status to identify your marginal rate.
For example, a single filer with $70,000 in taxable income in 2026 lands in the 22% bracket. But only the income above $50,400 is taxed at 22% — the rest is taxed at 10% and 12%.
Why Tax Brackets Matter
Knowing where your income falls can help you make sharper decisions about:
Retirement contributions: Pre-tax contributions to a 401(k) or traditional IRA may lower your taxable income.
Timing of income and deductions: Shifting income or deductible expenses near a bracket's edge can change how much is taxed at the higher rate.
Estimated tax payments: Self-employed and other filers can use bracket thresholds to plan quarterly payments.
Ways To Lower the Income Taxed at Higher Rates
Several strategies may reduce your taxable income and the share of it taxed at higher rates:
Contribute to a traditional IRA or 401(k). Pre-tax contributions reduce taxable income for the year.
Fund a health savings account. HSA contributions may lower taxable income if you have a qualifying plan.
Claim eligible deductions and credits. Deductions lower taxable income; credits cut your tax bill directly.
Lowering your taxable income doesn't always move you to a lower bracket, but it can reduce the amount taxed at your top rate.
Common Tax Bracket Misconceptions
A higher bracket does not tax all your income. Only the portion inside that bracket is taxed at the higher rate.
A raise will not shrink your take-home pay. Even if extra income reaches a higher bracket, you still keep more money overall.
Credits and deductions work differently. Deductions reduce taxable income, while credits reduce the tax you owe dollar for dollar.
File with MoneyLion: Once you know your bracket, MoneyLion's tax tools can help you organize your filing and look for deductions you may qualify for. Explore MoneyLion's tax filing tips and tools to get ready for tax season.
Bottom Line
Tax brackets are income ranges that set the federal tax rate on each slice of your income, and the U.S. keeps seven of them — 10% to 37% — for both 2025 and 2026. Because the system is progressive, only the income inside each bracket is taxed at that rate, so your effective rate usually lands below your top bracket.
Your next step: estimate your taxable income, match it to the table for your filing status and look for deductions that lower the amount taxed at your highest rate.
Key Terms
Tax bracket: An income range taxed at a specific federal rate.
Progressive tax: A system where higher portions of income are taxed at higher rates.
Marginal tax rate: The rate applied to your last dollar of taxable income.
Effective tax rate: The average rate you pay across all your taxable income.
Taxable income: Gross income minus deductions, used to find your bracket.
Standard deduction: A flat amount you can subtract from income — $15,750 single for 2025 and $16,100 for 2026.
Filing status: Your category — single, married filing jointly, married filing separately or head of household — which sets your bracket ranges.
Bracket creep: When inflation pushes income into a higher bracket without a real gain in buying power.
Summary generated by AI, verified by MoneyLion editors
Sources
Tax Foundation — 2025 Tax Brackets and Federal Income Tax Rates
Tax Foundation — 2026 Tax Brackets and Federal Income Tax Rates
FAQ
Here are quick answers to common questions about tax brackets.
What are tax brackets in simple terms?
Tax brackets are income ranges the federal government uses to decide how much income tax you owe. Each range has its own rate, and only the income inside a range is taxed at that range's rate.
How many tax brackets are there in the United States?
There are seven federal income tax brackets for both 2025 and 2026, with rates of 10%, 12%, 22%, 24%, 32%, 35% and 37%. The exact dollar thresholds depend on your filing status and adjust for inflation each year.
Does moving into a higher tax bracket mean all my income is taxed more?
No. Only the income that falls inside the higher bracket is taxed at that higher rate. The rest of your income stays taxed at the lower rates below it, so a raise still leaves you with more money.
What is the difference between marginal and effective tax rates?
Your marginal rate is the rate on your last dollar of income, which matches your top bracket. Your effective rate is the average rate across all your taxable income, and it's usually lower because your income is spread across several brackets.
Are tax brackets the same every year?
No. The IRS adjusts the income ranges each year for inflation, which helps keep rising wages from pushing you into a higher bracket. The rates themselves stayed the same from 2025 to 2026, but the dollar thresholds went up.
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