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Figuring out how much you owe for taxes can be complex and sometimes takes some work. That’s because the federal government and the Internal Revenue Service (IRS) don’t assess the same amount of tax for every dollar you earn. Instead, the IRS assigns your income to brackets with tax rates that increase as you earn more money. In addition to important changes to tax brackets, recent legislation has also expanded tax deductions that could help you save more if you plan to give to charity, live in a high-tax state, and more. Following are the federal tax tables and how to make sense of them to potentially reduce your upcoming tax bill.
2025 tax brackets
Tax rate
Single filers
Married couples filing jointly
Married couples filing separately
Head of household
Source: Internal Revenue Service
2026 tax brackets
Tax rate
Single filers
Married couples filing jointly
Married couples filing separately
Head of household
Source: Internal Revenue Service
How do tax brackets work? The US has a progressive tax system at the federal level with 7 tax brackets. As you earn more money, the additional income jumps to a higher bracket with a higher tax rate. (Over a certain amount, your income is taxed no further.) The Internal Revenue Service adjusts federal income tax brackets annually to account for inflation, and the new brackets can help you estimate your tax obligation based on your income and filing status for the year. For example, a hypothetical single filer would owe 10% on the first $11,925 of taxable income in 2025 whether that amount represents their total earnings, or they earn $1 million. The next tax bracket is 12% of taxable income levels between $11,926 to $48,475. The tax rates continue to increase as someone’s income moves into higher brackets. The IRS uses different federal income tax brackets and ranges depending on filing status: Read more in Viewpoints about how tax brackets work.
How do you figure out what tax bracket you’re in? You can figure out what tax bracket you’re in using the tables published by the IRS (see tables above). To figure out your tax bracket, first look at the rates for the filing status you plan to use: single, married filing jointly, married filing separately, or head of household. Next, determine your taxable income. Start by adding up all the income you’ve earned for the year that will be taxed, such as from salary, bonuses, tips, freelance income, alimony (from an agreement finalized prior to 2019 that has not since been modified), and interest earnings. Subtract things like 401(k) contributions and HSA contributions (these are already factored into your W-2, if you will receive one). Then subtract the standard deduction, or deductions if you plan to itemize. The difference is your total taxable income, though other adjustments to income or deductions may apply. Note: The top tax rate your income falls into is not the actual rate you’ll pay. It’s the rate you’ll pay on the amount of income that falls into the last bracket. Find the appropriate boxes listing the income thresholds for your taxable income and filing status to determine how much of your income falls in each bracket.
What is your federal marginal tax rate? The federal marginal tax rate is the federal income tax rate owed on your highest dollar of income. For example, if your income falls into the 24% tax bracket, your federal marginal tax rate is 24%. You might owe 24 cents for every dollar you earn. If your income pushes you into a higher tax bracket, your marginal tax rate increases to that next percentage, and you’d owe a higher share of taxes on the additional income.
What is your federal effective tax rate? Your federal effective tax rate is the total percentage of your income you pay in federal income tax, calculated by dividing what you owe in taxes by your total income. It essentially sums up how much you owe for each tax bracket into one percentage. For example, assume a hypothetical taxpayer who is married with $150,000 of joint income in 2025 is claiming the standard deduction of $31,500. Without considering other income, adjustments to income, or other deductions, their taxable income would be $118,500. They would owe the following in federal income taxes for 2025. 10% of the first $23,850 = $2,385 12% of the next portion ($73,100) up to $96,950 = $8,772 22% Of the remaining portion ($21,550) up to $206,700 =$4,741 They owe $15,898 of total taxes on $150,000 of income. Their effective tax rate is then calculated as follows: $15,898/$150,000=10.59%
Potential ways to get into a lower tax bracket You can potentially get into a lower tax bracket by reducing your taxable income for the year. Here are some tactics to consider:
Turn market losses into potential tax savings Fidelity customers with taxable investment accounts can use our Tax-Loss Harvesting ToolLog In Required to see any realized gains, identify potential losses, and sell positions that may help save on taxes.
Consider delaying income. If you expect to have more income than usual, such as from freelance or gig work, an annual bonus, or sales commissions, consider asking for a delayed payout until the following year, which could lower your income for the current year. The same concept can apply for your investments, for example, you could wait to sell an investment at a gain until the following year. Consult a tax advisor to help you pinpoint your exact tax bracket and, more importantly, the strategies you can use to reduce how much you owe. (责任编辑：) |