The sources of federal revenue are, in order of size, individual income taxes, payroll taxes for Social Security and Medicare, corporate income taxes, excise taxes on specific goods, customs duties on imports, and estate and gift taxes on wealth transfers. Together these brought approximately $4.9 trillion into the U.S. Treasury in fiscal year 2024, with individual income taxes alone generating roughly half the total.1Congressional Budget Office. Revenues in Fiscal Year 2024 – An Infographic Each source has its own rules, rates, and collection method.
Individual Income Taxes
Individual income taxes are the single largest source of federal money. The Sixteenth Amendment gives Congress the power to tax income “from whatever source derived,”2Congress.gov. Constitution of the United States – Sixteenth Amendment and the reach is broad: wages, salaries, interest, dividends, and most other earnings. Taxpayers report on Form 1040 each year.3Internal Revenue Service. About Form 1040, U.S. Individual Income Tax Return
The system is progressive. Income is taxed in layers, not all at one rate. For 2026, seven brackets apply, running from 10 percent to 37 percent. A single filer pays 10 percent on the first $12,400 of taxable income, then works up through the brackets until the top rate of 37 percent applies to income above $640,600.4Internal Revenue Service. Revenue Procedure 2025-32 These rates originated in the Tax Cuts and Jobs Act of 2017 and were made permanent by the One, Big, Beautiful Bill signed into law on July 4, 2025.
Most workers never write a check to the IRS during the year. Employers withhold estimated taxes from each paycheck and forward them to the Treasury, which keeps revenue flowing steadily and spares workers a single large bill at filing time. Returns are due April 15; an extension pushes the paperwork deadline to October 15 but does not extend the deadline for paying what you owe.5Internal Revenue Service. Need More Time to File? Don’t Wait, Request an Extension
Payroll Taxes for Social Security and Medicare
Payroll taxes are the second-largest source, and they are earmarked rather than deposited into general revenue. The Federal Insurance Contributions Act splits them into two pieces.
Social Security is funded by a 6.2 percent tax on employee wages up to $184,500 in 2026, matched dollar for dollar by the employer, for a combined 12.4 percent. Earnings above the cap are not subject to the tax.6Social Security Administration. Contribution and Benefit Base Medicare is different: 1.45 percent from the employee, 1.45 percent from the employer, no earnings ceiling, and 2.9 percent combined on all covered wages.7Internal Revenue Service. Topic No. 751, Social Security and Medicare Withholding Rates
High earners pay an Additional Medicare Tax of 0.9 percent on wages above $200,000 for single filers or $250,000 for joint filers. Employers do not match this surcharge.8Internal Revenue Service. Topic No. 560, Additional Medicare Tax
Self-employed workers pay both sides under the Self-Employment Contributions Act. The full 15.3 percent, made up of 12.4 percent for Social Security and 2.9 percent for Medicare, comes out of their own earnings and is reported on Schedule SE.9Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes)
Corporate Income Taxes
Corporations pay federal tax on net profits after subtracting business expenses such as operating costs, employee compensation, and interest. The Tax Cuts and Jobs Act of 2017 replaced a graduated structure that had topped out at 35 percent with a flat 21 percent rate, which remains in effect for 2026. Companies file Form 1120.10Internal Revenue Service. About Form 1120, U.S. Corporation Income Tax Return
The Inflation Reduction Act of 2022 added a backstop for the largest firms. The Corporate Alternative Minimum Tax sets a 15 percent floor on corporations whose average annual financial statement income exceeds $1 billion, so profitable companies cannot use deductions and credits to bring their effective rate to zero.11Internal Revenue Service. Corporate Alternative Minimum Tax Large corporations pay in quarterly rather than settling up once a year.
Capital Gains and Investment Income
Selling a stock, a piece of real estate, or another asset for more than you paid produces a capital gain, and the profit is taxable. Gains on assets held more than a year qualify for lower long-term rates of 0 percent, 15 percent, or 20 percent depending on taxable income.12Office of the Law Revision Counsel. 26 USC 1 – Tax Imposed Short-term gains, on assets held a year or less, are taxed at ordinary income rates.
For 2026, a single filer pays 0 percent on long-term gains up to $49,450 of taxable income, 15 percent up to $545,500, and 20 percent above. For joint filers, the 15 percent rate runs from $98,900 to $613,700, with the 20 percent rate above.4Internal Revenue Service. Revenue Procedure 2025-32
A separate 3.8 percent Net Investment Income Tax applies to high earners on capital gains, dividends, rental income, and interest. It hits the lesser of net investment income or the amount by which modified adjusted gross income exceeds $200,000 for single filers or $250,000 for joint filers.13Internal Revenue Service. Topic No. 559, Net Investment Income Tax Combined with the 20 percent long-term rate, the effective maximum federal rate on investment gains reaches 23.8 percent.
Excise Taxes and Customs Duties
Excise taxes target specific goods and activities. The federal gasoline tax is 18.4 cents per gallon, with nearly all of it directed to the Highway Trust Fund. Tobacco, alcohol, airline tickets, and certain chemicals carry their own excise rates. These are typically built into the price, so consumers pay them without seeing a separate line.
The Infrastructure Investment and Jobs Act reinstated Superfund excise taxes on certain chemicals and imported chemical substances starting in July 2022, with quarterly reporting by manufacturers and importers.14Internal Revenue Service. Superfund Chemical Excise Taxes
Customs duties are the other side of consumption-based revenue. Tariffs are charged on goods manufactured abroad and imported into the United States, with rates set by the Harmonized Tariff Schedule.15Harmonized Tariff Schedule. Harmonized Tariff Schedule Classifying a product correctly can be surprisingly complex; the rate on a wool suit may depend on where the fabric originated, how the garment was assembled, and whether the lining contains synthetic fibers.16U.S. Customs and Border Protection. Determining Duty Rates Tariff revenue fluctuates with trade volume and federal trade policy.
Estate and Gift Taxes
When someone dies owning substantial assets, the federal government taxes the transfer. For 2026, the estate tax exemption is $15 million per person, a large increase enacted by the One, Big, Beautiful Bill.17Internal Revenue Service. What’s New – Estate and Gift Tax Only value above the exemption is taxed, at rates reaching 40 percent, and executors file Form 706.18Internal Revenue Service. About Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return
Gift taxes run alongside the estate tax so people cannot simply give wealth away before death to avoid it. You can give up to $19,000 per recipient in 2026 without any filing requirement or reduction of your lifetime exemption.19Internal Revenue Service. Frequently Asked Questions on Gift Taxes Gifts above the annual amount require Form 709 and count against the $15 million lifetime exemption.20Internal Revenue Service. About Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return With the exemption so high, very few estates actually owe federal estate tax, though the reporting rules still cover large transfers.
Federal Reserve Remittances, Fees, and Fines
Several smaller streams round out federal revenue. The Federal Reserve has historically been one of the more unusual contributors. After covering its operating expenses and paying dividends to member banks, the Fed remits excess earnings to the Treasury, and those payments exceeded $109 billion in 2021. Since 2023, however, the Fed has been operating at a net loss because the interest it pays on bank reserves now exceeds the interest it earns on its bond portfolio. As of 2024, the Fed had accumulated roughly $79 billion in deferred assets for that year alone, and no remittances flowed to the Treasury.21Federal Reserve. Statistical Tables Remittances will resume only after the Fed earns back enough to cover those accumulated losses.
The government also collects user fees for services such as patent applications, national park entry, and immigration processing. Fines and penalties from regulatory enforcement and legal settlements add another layer. None of these individually rivals the major tax categories, but they offset the cost of running specific federal agencies and programs.