US Federal Income Tax Brackets for 2026, Explained Simply

The United States taxes personal income on a graduated schedule of seven rates: 10, 12, 22, 24, 32, 35 and 37 per cent. For tax year 2026 — the year you report on a return filed in early 2027 — a single filer pays 10 per cent on taxable income up to $12,400, 12 per cent on the portion between $12,400 and $50,400, 22 per cent up to $105,700, 24 per cent up to $201,775, 32 per cent up to $256,225, 35 per cent up to $640,600 and 37 per cent on anything above that. Married couples filing jointly use the same rates with thresholds that are roughly double the single figures at the lower end, ending with 37 per cent above $768,700.

The single most persistent myth in American tax conversation is that crossing into a new bracket taxes all of your income at the higher rate. It does not. Brackets are slices, not switches. If you are single with $60,000 of taxable income, only the roughly $9,600 that sits above $50,400 is exposed to the 22 per cent rate. The dollars below that continue to be taxed at 10 and 12 per cent. That is why the tax on $60,000 comes to around $8,000 rather than the $13,200 a flat 22 per cent would imply.

The number people should actually care about is the effective rate: total tax divided by total income. Our worked example produces an effective federal rate of roughly 11 per cent on a $76,000 salary once the standard deduction is applied. Compare that with the 22 per cent marginal bracket the same person occupies and the difference in perception is stark. Marginal rate matters for decisions at the edge — whether to take overtime, how much a bonus really nets, whether a deductible contribution is worth making. Effective rate matters for budgeting.

Taxable income is not your salary. You start with gross income, subtract above-the-line adjustments such as traditional retirement contributions, health savings account deposits and half of any self-employment tax, and arrive at adjusted gross income. From AGI you subtract either the standard deduction — $16,100 single, $32,200 married filing jointly, $24,150 head of household for 2026 — or your itemised deductions if they are larger. Only what remains passes through the bracket table.

Brackets are adjusted every year for inflation using the chained consumer price index. This matters more than it sounds. Without indexation, ordinary pay rises that merely keep pace with prices would quietly push people into higher brackets, a phenomenon economists call bracket creep. The annual adjustment prevents that, which is why the 2026 thresholds are a few percentage points wider than the 2025 ones even though the rates themselves have not moved.

Two additional layers sit alongside the income tax and are easy to forget when comparing job offers. Payroll taxes take 6.2 per cent for Social Security on wages up to $184,500 in 2026 and 1.45 per cent for Medicare with no ceiling. State income tax then ranges from nothing in nine states to more than 12 per cent at the top in California. A $150,000 offer in Austin and the same offer in Manhattan produce meaningfully different take-home pay, and none of that difference comes from the federal brackets.

Long-term capital gains and qualified dividends run on a separate and gentler schedule of 0, 15 and 20 per cent, stacked on top of your ordinary income. Short-term gains, on assets held a year or less, are taxed as ordinary income at the rates above. High earners may also face the 3.8 per cent net investment income tax. If a large part of your income comes from investments rather than wages, the ordinary bracket table alone will overstate your bill.

The practical takeaway is to know both of your rates. Use the effective rate to plan your budget and judge whether your withholding is roughly right, and use the marginal rate to evaluate any decision that adds or removes a dollar of income. Our US tax calculator shows both, along with the band-by-band breakdown, so the arithmetic above is visible rather than assumed.