Federal Income Tax Brackets: Filing Status and Capital Gains

Federal income tax brackets for 2026 run through seven rates — 10%, 12%, 22%, 24%, 32%, 35%, and 37% — and each rate applies only to the slice of your taxable income that falls inside its threshold for your filing status. A single filer hits the top 37% rate on taxable income above $640,600; a married couple filing jointly hits it above $768,700. Moving into a higher bracket never changes the rate on income you already earned in a lower one. Only the dollars sitting inside each band get taxed at that band’s rate.¹

2026 Brackets by Filing Status

The IRS uses different threshold tables for each filing status, but the seven rates are the same across all of them. Married filing separately thresholds mirror single filer thresholds, and qualifying surviving spouse thresholds mirror married filing jointly.¹

Single Filers

10%: Taxable income up 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

10%: Taxable income up 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

10%: Taxable income up to $17,700
12%: $17,701 to $67,450
22%: $67,451 to $105,700
24%: $105,701 to $201,775
32%: $201,776 to $256,200
35%: $256,201 to $640,600
37%: Over $640,600

How the Layering Actually Works

Think of your taxable income as flowing into stacked containers. The first fills at 10%. When it’s full, the next dollar spills into the 12% container, and so on through all seven levels. Each container only taxes the dollars inside it. The higher rate never reaches back down.

Take a single filer with $100,000 in taxable income for 2026:

10% on the first $12,400: $1,240
12% on the next $38,000 (from $12,401 to $50,400): $4,560
22% on the remaining $49,600 (from $50,401 to $100,000): $10,912

Total federal income tax: $16,712. That’s an effective rate of about 16.7%, even though the marginal rate — the rate on the last dollar earned — is 22%.¹

The two numbers do different jobs. Effective rate tells you the share of your income actually going to federal tax. Marginal rate tells you what happens to the next dollar. If you’re weighing extra freelance work and you’re in the 24% bracket, you keep roughly 76 cents of each additional dollar for federal purposes, before state and payroll taxes come out.

Getting to Taxable Income

The bracket tables apply to taxable income, not gross pay. Two reductions come first.

Start with adjusted gross income: total earnings from all sources (wages, freelance income, interest, dividends, rental income, retirement distributions) minus the adjustments listed on Schedule 1 of Form 1040, which include items like student loan interest, traditional IRA contributions, and the deductible portion of self-employment taxes. AGI appears on line 11 of your return.²

From AGI, subtract either the standard deduction or your itemized deductions, whichever is larger. The 2026 standard deduction is $16,100 for single filers and for married filing separately, $32,200 for married filing jointly, and $24,150 for head of household.¹ If you itemize, you add up qualifying expenses such as mortgage interest, state and local taxes (capped at $10,000), charitable contributions, and unreimbursed medical costs above 7.5% of AGI.

Starting in 2026, taxpayers age 65 or older can also claim an additional deduction of up to $6,000 per person ($12,000 if both spouses on a joint return qualify), whether they itemize or take the standard deduction. It phases out once modified AGI exceeds $75,000 for single filers or $150,000 for joint filers.³

What remains after the deduction is your taxable income, and that’s the figure that enters the bracket tables.

Why Filing Status Matters

Filing status decides which table you use. The IRS recognizes five statuses:⁴

Single: unmarried, divorced, or legally separated without a qualifying dependent for head of household.
Married filing jointly: married couples who combine income and deductions on one return. This status usually produces the lowest combined tax.
Married filing separately: married couples who each file their own return. Bracket thresholds match single filer thresholds, which often produces a higher combined bill, though situations like income-driven student loan repayment can make it worthwhile.
Head of household: unmarried taxpayers who paid more than half the cost of maintaining a home for a qualifying dependent. Wider bands than single, so a lower tax at the same income.
Qualifying surviving spouse: available for two years after a spouse’s death, with a dependent child living with you and more than half the cost of keeping up your home paid by you. Same thresholds and standard deduction as married filing jointly.

The dollar difference is real. A single filer crosses into the 22% bracket at $50,401; a married couple filing jointly doesn’t reach that rate until $100,801.

Long-Term Capital Gains Use a Different Schedule

Profits from investments held longer than one year don’t run through the ordinary brackets at all. Long-term capital gains have their own three-tier rate structure: 0%, 15%, and 20%.

For 2026, a single filer pays 0% on long-term gains while taxable income stays under $49,450, 15% above that, and 20% once taxable income exceeds $545,500. Married couples filing jointly hit the 15% threshold at $98,900 and the 20% threshold at $613,700.¹

Short-term gains, from assets held one year or less, get no special treatment and are taxed as ordinary income through the regular brackets. Higher earners face an additional 3.8% Net Investment Income Tax on investment income when modified AGI exceeds $200,000 for single filers or $250,000 for married couples filing jointly. The surtax covers interest, dividends, capital gains, rental income, and royalties, but not wages or active business income.⁵

Why the Brackets Move Every Year

The IRS adjusts bracket thresholds annually using the Chained Consumer Price Index for All Urban Consumers, so inflation doesn’t quietly push you into a higher bracket when your real purchasing power hasn’t changed.⁶ The same indexing applies to the standard deduction, the earned income credit, and more than 40 other dollar-denominated provisions. Updated figures typically come out in the fall before the tax year begins. The 2026 single standard deduction of $16,100 is up from $14,600 in 2024.

One provision that has never been indexed: the $200,000 and $250,000 thresholds for the 3.8% Net Investment Income Tax, frozen since 2013. Inflation pulls more taxpayers into that surtax each year.

State Income Taxes Sit on Top

Federal brackets are only part of the bill. Most states impose their own income tax. State rates range from about 1% to over 13%, and structures vary — some states use graduated brackets like the federal system, others apply a single flat rate. Nine states impose no broad individual income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. New Hampshire taxes interest and dividends, and Washington taxes only capital gains.

If you itemize on your federal return, you can deduct state and local taxes paid, up to a combined cap of $10,000. State rules on what counts as taxable income and which deductions and credits apply differ from federal rules, so your state effective rate won’t necessarily track your federal one.

1
Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
2
Internal Revenue Service. Definition of Adjusted Gross Income
3
Internal Revenue Service. 2026 Filing Season Updates and Resources for Seniors
4
Internal Revenue Service. Filing Status
5
Internal Revenue Service. Topic No. 559, Net Investment Income Tax
6
Office of the Law Revision Counsel. 26 USC 1 – Tax Imposed