The U.S. federal income tax system uses progressive tax brackets, meaning your income is taxed at increasing rates as it rises. Understanding how brackets work is essential for tax planning, evaluating raises, and making smart financial decisions.
Important: Moving into a higher tax bracket does not mean all your income is taxed at that higher rate. Only the income within each bracket is taxed at that bracket's rate.
2026 Federal Tax Brackets — Single Filers
The following brackets apply to taxable income (after deductions) for single filers in tax year 2026 (per Rev. Proc. 2025-32):
- 10%: $0 – $12,400
- 12%: $12,400 – $50,400
- 22%: $50,400 – $105,700
- 24%: $105,700 – $201,775
- 32%: $201,775 – $256,225
- 35%: $256,225 – $640,600
- 37%: Over $640,600
Standard Deduction for 2026
Most taxpayers take the standard deduction rather than itemizing. For 2026:
- Single: $16,100
- Married filing jointly: $32,200
- Head of household: $24,150
- Married filing separately: $16,100
Marginal vs Effective Tax Rate
Your marginal tax rate is the rate applied to your last dollar of income — the highest bracket your income reaches. Your effective tax rate is your total federal tax divided by your total taxable income, representing the average rate you actually pay.
For example, a single filer with $80,000 in taxable income has a marginal rate of 22%, but their effective rate is approximately 13.5%. The first $12,400 is taxed at 10%, the next $38,000 at 12%, and only the amount above $50,400 is taxed at 22%.
Strategies to Reduce Your Tax Bill
Legal tax reduction strategies can save you thousands each year:
- Maximize pre-tax retirement contributions: 401(k) contributions reduce your taxable income dollar-for-dollar, up to $23,500 in 2026.
- Contribute to an HSA: If you have a high-deductible health plan, HSA contributions are tax-deductible and grow tax-free. Limits: $4,300 individual / $8,550 family.
- Harvest tax losses: Sell investments at a loss to offset capital gains. Up to $3,000 in net losses can offset ordinary income per year.
- Itemize when it exceeds the standard deduction: Track mortgage interest, state/local taxes (up to $10,000), and charitable donations.
- Time your income: If possible, defer bonuses or income to a year when you expect lower earnings, or accelerate deductions into high-income years.
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Frequently Asked Questions
Does a raise push all my income into a higher tax bracket?
No. Only the income above the bracket threshold is taxed at the higher rate. A raise always increases your take-home pay. For example, if a $5,000 raise pushes you from the 22% to the 24% bracket, only the portion above the threshold is taxed at 24%. You will never take home less money because of a raise.
What is the difference between tax deductions and tax credits?
Tax deductions reduce your taxable income. If you are in the 22% bracket, a $1,000 deduction saves you $220 in taxes. Tax credits directly reduce your tax bill dollar-for-dollar. A $1,000 tax credit saves you exactly $1,000. Credits are generally more valuable than deductions of the same amount.
Should I choose standard or itemized deductions?
Take whichever is higher. With the 2026 standard deduction at $16,100 for single filers ($32,200 married filing jointly), most taxpayers benefit from the standard deduction. You would need more than $16,100 ($32,200 MFJ) in qualifying itemized deductions — mortgage interest, state/local taxes, and charitable donations — for itemizing to save more.
How do state income taxes affect my total tax burden?
State income taxes are an additional layer on top of federal taxes. Nine states (including Texas, Florida, and Nevada) have no state income tax, while California's top rate reaches 13.3%. Your total effective tax rate combines federal, state, and FICA taxes. When evaluating a job offer or relocation, factor in the state tax difference — it can amount to thousands of dollars per year in take-home pay.