Federal marginal tax brackets split your taxable income into layers and tax each layer at its own rate. The first layer is taxed at 10%, and only the income that spills into each higher layer faces that layer’s higher rate. For the 2026 tax year, there are seven brackets running from 10% to 37%, and the dollar thresholds that separate them adjust each year for inflation. Crossing into a higher bracket never costs you more in tax than the extra income itself.
How the Bracket Math Works
Picture your income flowing into a stack of buckets. The bottom bucket fills first and is taxed at 10%. Once it’s full, income spills into the next bucket and is taxed at 12%. Income keeps spilling upward through 22%, 24%, 32%, 35%, and finally 37%. Only the dollars sitting inside a given bucket are taxed at that bucket’s rate.1Office of the Law Revision Counsel. 26 USC 1 – Tax Imposed
The most persistent myth about this system is that crossing into a higher bracket re-taxes all your income at the new rate. It doesn’t. If you’re a single filer who earns one dollar over the 12% ceiling, exactly one dollar gets taxed at 22%. Every dollar underneath stays where it was. Nobody takes home less money because of a raise.
2026 Federal Tax Brackets by Filing Status
The IRS publishes new thresholds every year. For the 2026 tax year, single filers use these brackets:2Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
- 10% on taxable income up to $12,400
- 12% on $12,401 to $50,400
- 22% on $50,401 to $105,700
- 24% on $105,701 to $201,775
- 32% on $201,776 to $256,225
- 35% on $256,226 to $640,600
- 37% on income over $640,600
Married couples filing jointly get thresholds that are roughly double the single-filer figures:3Internal Revenue Service. Rev. Proc. 2025-32
- 10% on taxable income up to $24,800
- 12% on $24,801 to $100,800
- 22% on $100,801 to $211,400
- 24% on $211,401 to $403,550
- 32% on $403,551 to $512,450
- 35% on $512,451 to $768,700
- 37% on income over $768,700
Head of household filers land between single and joint thresholds. Married individuals filing separately use the same thresholds as single filers for most brackets, but the 35% bracket ceiling is lower, at $384,350.3Internal Revenue Service. Rev. Proc. 2025-32
Your filing status is fixed as of December 31. Get married on the last day of the year and the IRS considers you married for the entire year; get divorced on the same date and you file as single or head of household.4Internal Revenue Service. Filing Status
The Brackets Apply to Taxable Income, Not Gross
The rates don’t touch every dollar you earn. They apply to your taxable income, which is what remains after two subtractions from your gross earnings.5Office of the Law Revision Counsel. 26 USC 63 – Taxable Income Defined
First, certain expenses come off the top to produce your adjusted gross income (AGI). Contributions to a traditional IRA, student loan interest, and half of self-employment taxes paid all reduce AGI before deductions enter the picture.
Second, you subtract either the standard deduction or the total of your itemized deductions, whichever is larger. For 2026 the standard deduction is $16,100 for single filers or married filing separately, $32,200 for married filing jointly, and $24,150 for head of household.2Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 Itemizing pays off only when deductible expenses (mortgage interest, state and local taxes capped at $10,000, charitable contributions, and similar costs) add up to more than the standard deduction. For most filers, the standard deduction is larger. The result of this subtraction is the number that enters the bracket math.
A Worked Example
Take a single filer with $75,000 in taxable income for 2026. Here’s how each bracket takes its slice:
- The first $12,400 taxed at 10% = $1,240
- The next $38,000 (from $12,401 to $50,400) taxed at 12% = $4,560
- The remaining $24,600 (from $50,401 to $75,000) taxed at 22% = $5,412
Total federal income tax: $11,212. The last dollar is in the 22% bracket, so 22% is the marginal rate. But more than two-thirds of the income was taxed at 10% or 12%, and the total tax works out to about 14.9% of taxable income.
Marginal Rate vs. Effective Rate
These two numbers get confused constantly, and they answer different questions.
Your marginal rate is the bracket holding your next dollar of income. It’s the right number to use when you’re deciding whether to take on extra work, convert a traditional IRA to a Roth, or time a bonus. Every additional dollar you earn or realize will be taxed at this rate.
Your effective rate is the weighted average across all the brackets your income passed through. Divide your total tax by your total taxable income and you get a single percentage that reflects what you actually paid. For most filers, the effective rate runs 5 to 15 percentage points below the marginal rate. Someone in the 24% bracket with moderate taxable income might have an effective rate closer to 15% or 16%.
Use the marginal rate to evaluate the tax cost of additional income. Use the effective rate to compare your overall burden across years or against other taxpayers.
Income That Doesn’t Run Through These Brackets
Not every dollar you receive is taxed on the schedule above. A few categories follow their own rules, and assuming the seven brackets cover everything is a common way to miscalculate.
Long-term capital gains, meaning profits from selling investments held longer than one year, are taxed at preferential rates of 0%, 15%, or 20%. For 2026, the 0% rate applies to taxable income up to $49,450 for single filers ($98,900 joint), the 15% rate runs to $545,500 single ($613,700 joint), and the 20% rate applies above those thresholds. Short-term gains, on assets held one year or less, are taxed as ordinary income through the standard brackets. High earners may also owe an additional 3.8% net investment income tax on investment income when modified AGI exceeds $200,000 single or $250,000 joint, which pushes the top rate on long-term gains to 23.8%.6Office of the Law Revision Counsel. 26 USC 1411 – Imposition of Tax
Self-employed income carries an additional layer on top of ordinary income tax. Self-employment tax covers the Social Security and Medicare contributions an employer would normally split with you, at a combined rate of 15.3%: 12.4% for Social Security on earnings up to $184,500 in 2026, and 2.9% for Medicare on all earnings with no cap.7Social Security Administration. Contribution and Benefit Base Half of it is deductible when calculating AGI.
The alternative minimum tax is a parallel calculation that mainly catches taxpayers with large amounts of certain deductions, incentive stock option income, or tax-exempt interest from private activity bonds. For 2026, it exempts the first $90,100 of income for single filers and $140,200 for joint filers, with the exemptions phasing out at $500,000 and $1,000,000 respectively.2Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 Most filers never trigger it, but if your income sits in the mid-six figures, running the AMT numbers alongside the regular calculation is worth the effort. You pay whichever amount is higher.