# 2025 Tax Brackets and Federal Income Tax Rates

![Tax Bracket](https://www.investopedia.com/thmb/po_kQ3jg2zNWUNBeWYlszFSGmH4=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/Tax_Bracket-Final-1824baf32c144f4db2f9ca7c7e8a5faa.jpg)

*— Candra Huff / Investopedia*

For [tax year](https://www.investopedia.com/terms/t/taxyear.asp) 2025, which applies to taxes filed in 2026, there are seven federal tax brackets with income tax rates of 10%, 12%, 22%, 24%, 32%, 35%, and 37%. These are the same tax brackets that applied for tax year 2024.

Tax brackets are part of a [progressive tax](https://www.investopedia.com/terms/p/progressivetax.asp) system in which the level of tax rates progressively increases as an individual’s income grows. Low incomes fall into tax brackets with relatively low-income tax rates, while higher earnings fall into brackets with higher rates.

The current brackets were established by the Tax Cuts and Jobs Act of 2017, but income thresholds for individual brackets can be adjusted for [inflation](https://www.investopedia.com/terms/i/inflation.asp).

### Key Takeaways

*   There are currently seven federal tax brackets in the United States, with rates ranging from 10% to 37%.
*   The U.S. tax system is progressive, with people with less income taxed at lower rates and those with more income taxed at higher rates.
*   Unless your total income fits in just the lowest tax bracket, you are charged at multiple rates, according to the additional brackets into which your income flows.
*   Typically, the Internal Revenue Service (IRS) adjusts tax brackets for inflation every year.
*   There are numerous legal ways to lower your taxes, including lowering your taxable income via contributions to retirement accounts and taking advantage of tax credits you may be eligible for.

## Federal Income Tax Brackets and Tax Rates for 2025

_Source: Internal Revenue Service (IRS)_  

Here, for comparison, are the 2024 federal income tax brackets and tax rates.

_Source: Internal Revenue Service (IRS)_

## How Income Tax Brackets Work

Most taxpayers—all except those who fall squarely into only the minimum bracket—have income that is taxed progressively. This means that their income is subject to multiple rates beyond the nominal rate of their tax bracket. The dollar ranges in each bracket also vary according to filing status ([single](https://www.investopedia.com/terms/s/single.asp), [married filing jointly](https://www.investopedia.com/terms/m/mfj.asp) and [qualifying widow\[er\]s](https://www.investopedia.com/terms/q/qualified-widow-or-widower.asp), [married filing separately](https://www.investopedia.com/terms/m/mfs.asp), and [head of household](https://www.investopedia.com/terms/h/head_of_household.asp)).

An annual income of $100,000 fits the 22% tax bracket for all filing statuses in tax year 2025. However, the entire $100,000 isn't taxed at 22%. It's taxed at different rates that are aligned with the various brackets of income that cover the segments of income up to $100,000. So, ultimately a taxpayer pays less than they would if their total income were taxed at 22%.

That also means a taxpayer’s tax bracket doesn't necessarily reflect the percentage of their income that they will pay in taxes—what's known as the [effective tax rate](https://www.investopedia.com/terms/e/effectivetaxrate.asp).

There are numerous online sources to find your specific federal income tax bracket, including the IRS's annual tax tables, which provide highly detailed tax filing statuses in increments of $50 of taxable income up to $100,000.

Other websites provide tax bracket calculators that do the math for you, as long as you know your [filing status](https://www.investopedia.com/terms/f/filingstatus.asp) and taxable income. [Your tax bracket can shift from year to year](https://www.investopedia.com/ask/answers/111715/are-tax-brackets-adjusted-inflation.asp), depending on inflation adjustments and changes in your income and filing status, so it’s worth checking annually.  

> **Important**
>
> Tax brackets are adjusted each year for inflation, using the Consumer Price Index (CPI).

## Example: How to Calculate Your Taxes

Here's the tax responsibility and the effective tax rate for a single filer with a taxable income of $50,000 in 2025:

The first $11,925 is taxed at 10%: $11,925 × 0.10 = $1,192.50

The next $11,926 to $48,475, or $36,549, is taxed at 12%: $36,549 × 0.12 = $4,385.88

Finally, the remaining $1,525 (what’s left of the $50,000 income) is taxed at 22%: $1,525 × 0.22 = $335.50

Add the taxes owed in each of the brackets:

Total taxes: $1,192.50 + $4,385.88 + $335.50 = $5,913.88

The individual’s effective tax rate is approximately 13% of income:

Divide total taxes by annual earnings: $5,913.88 ÷ $50,000 = 0.12

Multiply 0.12 by 100 to convert to a percentage, which is 12%.

> **Fast Fact**
>
> Taxes that you pay on 401(k) withdrawals are also based on tax brackets.

## What Is a Marginal Tax Rate?

Thanks to its progressive tax system, the U.S. uses a [marginal tax rate](https://www.investopedia.com/terms/m/marginaltaxrate.asp) to determine taxes owed. A marginal tax rate determines the tax paid on an additional dollar of income that takes a taxpayer into a higher tax bracket.

The marginal tax rate increases [as a taxpayer’s income increases](https://www.investopedia.com/financial-edge/0212/how-getting-a-raise-affects-your-taxes.aspx). There are different tax rates for various levels of income. In other words, taxpayers will pay the lowest tax rate on the first “bracket” or level of taxable income, a higher rate on the next level, and so on.

When determining which tax bracket to use, you should first calculate your [taxable income](https://www.investopedia.com/terms/t/taxableincome.asp), including [earned](https://www.investopedia.com/terms/e/earnedincome.asp) and [investment income](https://www.investopedia.com/terms/i/investmentincome.asp) minus adjustments and [deductions](https://www.investopedia.com/terms/t/tax-deduction.asp).  

## What Is an Effective Tax Rate?

An [effective tax rate](https://www.investopedia.com/terms/e/effectivetaxrate.asp#) is the percentage of tax owed on taxable income. The effective tax rate is lower than the marginal tax rate because the latter breaks down your income into different tiers. Income at the first tier is taxed at a low rate, and each tier above it is taxed at a progressively higher rate than the previous level.

You can determine what your effective tax rate is by dividing your total tax by your taxable income on your federal tax return. On Form 1040, divide the figure on line 24 (your total tax) by the figure on line 15 (your taxable income), and then multiply that figure by 100.

## How to Reduce Your Taxes

### Deductions

Deductions decrease the amount of your income that is subject to taxes, so try to take as many as you can claim. For example, you can contribute the maximum to a retirement account at work, such as a [401(k)](https://www.investopedia.com/terms/1/401kplan.asp), and/or contribute to a [traditional individual retirement account (IRA)](https://www.investopedia.com/terms/t/traditionalira.asp). If you have the option of a [high-deductible health insurance plan](https://www.investopedia.com/terms/h/hdhp.asp) at work and you open a [health savings account (HSA)](https://www.investopedia.com/terms/h/hsa.asp), HSA contributions made by payroll deduction are excluded from your taxable income. A [flexible spending account (FSA)](https://www.investopedia.com/terms/f/flexiblespendingaccount.asp) can also help to reduce your taxable income.

### Credits

Be sure to take advantage of tax credits you are eligible for, too. Tax credits come directly off the amount you owe in taxes to the IRS—what's known as a dollar-for-dollar perk. Examples of tax credits include the  [Child Tax Credit](https://www.investopedia.com/terms/c/childtaxcredit.asp), the [Earned Income Tax Credit (EITC)](https://www.investopedia.com/terms/e/earnedincomecredit.asp), the [American Opportunity Tax Credit](https://www.investopedia.com/terms/a/american-opportunity-tax-credit.asp), the [Lifetime Learning Credit (LLC)](https://www.investopedia.com/terms/l/lifelearningcredit.asp), and the [Saver's Credit](https://www.investopedia.com/terms/s/saverstaxcredit.asp).

## State Tax Brackets

Some states have [no income tax](https://www.investopedia.com/financial-edge/0210/7-states-with-no-income-tax.aspx): Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, and Wyoming. Washington only taxes investment income and capital gains for certain high earners. New Hampshire doesn’t tax earned wages, but it does tax [investment income](https://www.investopedia.com/terms/i/investmentincome.asp) and [interest](https://www.investopedia.com/terms/i/interest.asp). However, it is phasing out those taxes now, which will bring the number of states with no income tax to eight by the end of 2024.

In 2024, 12 states had a flat rate structure, with a single rate applying to a resident’s income: Arizona (2.5%), Colorado (4.40%), Georgia (5.49%), Idaho (5.8%), Illinois (4.95%), Indiana (3.05%), Kentucky (4.0%), Michigan (4.25%), Mississippi (4.7%), North Carolina (4.5%), Pennsylvania (3.07%), and Utah (4.65%).

In other states, the number of tax brackets varies from three to as many as nine (in California and New York) and even 12 (in Hawaii). The marginal tax rates in these brackets also vary considerably. California has the highest, maxing out at 13.3%.

State income tax regulations may or may not mirror federal rules. Some states allow residents to use the federal personal exemption and [standard deduction](https://www.investopedia.com/terms/s/standarddeduction.asp) amounts for figuring state income tax, while others have their own exemption and standard deduction amounts.

## How Do I Know Which Tax Bracket I Am in?

The simplest way to find out what tax bracket you are in is first, to know what your filing status is (for example, single or married filing jointly) and second, to look at the federal tax brackets issued by the [Internal Revenue Service (IRS)](https://www.investopedia.com/terms/i/irs.asp) and see which bracket your taxable income lands in. This is also known as your marginal tax rate. For example, if your filing status is married filing jointly and your taxable income is $115,000, your tax bracket is 22%.

## How Much Can I Earn Before I Pay 40% Tax?

Currently, there is no 40% tax bracket. For 2025, the highest earners in the United States pay a top rate of 37% federal tax on all income made above $626,350 (single filers) and $751,600 (married couples filing jointly)_._

## How Do I Calculate My Tax Bracket?

To estimate which tax brackets your earnings will fall under, you could do the math yourself by using the tables shown above or by visiting the [Internal Revenue Service (IRS)](https://www.investopedia.com/terms/i/irs.asp) website, which provides highly detailed tax filing statuses in increments of $50 of taxable income (over $3,000) and up to $100,000.

## The Bottom Line

The federal tax system in the U.S. is progressive. Taxpayers who fall into lower brackets pay lower rates than taxpayers in higher brackets. In 2024 and 2025, there are seven federal tax brackets, with rates ranging from 10% to 37%.

Unless your taxable income lands you in the lowest tax bracket, you are charged at multiple rates as your income rises. Your entire income is not subject to the rate of the bracket classified for your total income level.

> **Article Sources**
>
> 1.  Internal Revenue Service. "[IRS Releases Tax Inflation Adjustments for Tax Year 2025](https://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2025)."
>     
> 2.  Internal Revenue Service. "[IRS Provides Tax Inflation Adjustments for Tax Year 2024](https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2024)."
>     
> 3.  Tax Policy Center. "[How Did the Tax Cuts and Jobs Act Change Personal Taxes?](https://www.taxpolicycenter.org/briefing-book/how-did-tax-cuts-and-jobs-act-change-personal-taxes)"
>     
> 4.  Internal Revenue Service. "[IRS Provides Tax Inflation Adjustments for Tax Year 2023](https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2023)."
>     
> 5.  Tax Foundation. "[2024 Tax Brackets](https://taxfoundation.org/data/all/federal/2024-tax-brackets/)."
>     
> 6.  Peter G. Peterson Foundation. "[What Is The Difference Between the Statutory and Effective Tax Rate?](https://www.pgpf.org/blog/2022/03/what-is-the-difference-between-the-statutory-tax-rate-and-the-effective-tax-rate)"
>     
> 7.  Internal Revenue Service. “[1040 and 1040-SR: Tax and Earned Income Credit Tables](https://www.irs.gov/pub/irs-dft/i1040tt--dft.pdf),” Pages 3–14.
>     
> 8.  U.S. Bureau of Labor Statistics. “[Consumer Price Index: Presentation](https://www.bls.gov/opub/hom/cpi/presentation.htm).”
>     
> 9.  Internal Revenue Service. “[Roth Comparison Chart: Roth 401(k), Roth IRA, and Pre-tax 401(k) Retirement Accounts](https://www.irs.gov/retirement-plans/roth-comparison-chart).”
>     
> 10.  Tax Foundation. "[State Individual Income Tax Rates and Brackets, 2024](https://taxfoundation.org/data/all/state/state-income-tax-rates-2024/)."
>      
> 11.  New Hampshire Department of Revenue Administration. “[Frequently Asked Questions—Interest & Dividend Tax: What Is the Interest and Dividends Tax (I&D Tax)?](https://www.revenue.nh.gov/faq/interest-dividend.htm#what)”