Tax Bracket
The range of income taxed at a specific rate under the U.S. progressive tax system.
What You Need to Know
Tax brackets determine how much federal income tax you pay. The U.S. uses a progressive system—you don't pay one flat rate on all income. Instead, different portions of your income are taxed at different rates.
2025 Federal Tax Brackets (Single Filers):
- 10%: $0 - $11,925
- 12%: $11,926 - $48,475
- 22%: $48,476 - $103,350
- 24%: $103,351 - $197,300
- 32%: $197,301 - $250,525
- 35%: $250,526 - $626,350
- 37%: $626,351+
How It Really Works: If you earn $60,000:
- First $11,925 taxed at 10% = $1,193
- Next $36,550 ($11,926-$48,475) at 12% = $4,386
- Remaining $11,525 ($48,476-$60,000) at 22% = $2,536
- Total tax: $8,115 (13.5% effective rate, NOT 22%)
Marginal vs. Effective Rate:
- Marginal Rate: The rate on your last dollar earned (22% in example above)
- Effective Rate: Average rate across all income (13.5% in example)
Why This Matters:
- A $10,000 raise doesn't push ALL your income to a higher bracket—only the extra $10,000
- "Bracket creep" is a myth—you'll always take home more from a raise
Deductions Lower Taxable Income: Standard deduction ($14,600 single in 2025) reduces your taxable income before applying brackets.
Sources & References
This information is sourced from authoritative government and academic institutions:
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Related Terms in Career & Income
AGI (Adjusted Gross Income)
Your total gross income minus specific deductions, used to determine tax liability and eligibility for credits.
After-Tax Income
Your take-home pay after federal, state, and payroll taxes are deducted—the actual money you can spend.
FICA (Federal Insurance Contributions Act)
Payroll taxes that fund Social Security and Medicare, totaling 7.65% of wages for employees (matched by employers).
Gross Income
Your total income before any taxes or deductions are taken out—the starting point for tax calculations.
Marginal Tax Rate
The tax rate applied to your last dollar of income—the rate you pay on additional earnings.
Standard Deduction
A fixed dollar amount that reduces your taxable income, available to all taxpayers who don't itemize.