It’s likely that portions of your taxable income are taxed at different rates, in different tax brackets. Your marginal tax bracket represents the highest tax rate you’ll pay on your taxable income. Depending on your filing status and the income you received during the year, your marginal tax rate could be as high as 37%.
If you want to determine your marginal tax bracket for the 2023 tax year, use our calculator. Simply enter your taxable income and filing status to view your top tax rate.
Calculator disclaimer: Calculations are estimates based on the tax laws as of November 2023. You may want to consult with a tax professional concerning your tax situation.
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What Are Tax Brackets?
Tax brackets are the amount of tax you’ll pay on a portion of your income. The United States has a progressive tax system, which means your tax burden increases as your income rises. Increments of your income are subject to different rates within different tax brackets.
That’s because the U.S. tax system is designed so that higher-income earners pay a larger amount of the nation’s taxes, while taxpayers with low or modest incomes have a smaller tax burden.
How Do Tax Brackets Work?
Your tax bracket is determined by the highest dollar amount you earned, based on your taxable income, which may be lower than the total amount you made during the year.
Let’s say you earned $60,000 in 2022 and filed as a single taxpayer. After deductions and adjustments, $50,000 of that income would have been taxable. The calculator will show that the marginal tax rate for a single person with $50,000 in taxable income is 22%.
As mentioned, the U.S. tax system is “progressive,” so not all of your income will be taxed at that rate.
Your first $10,275 of earnings will be taxed in the lowest tax bracket: 10%. The next tier of your income will be taxed at a rate of 12%. Once your income progresses to its highest tax bracket—22% in this example—you’ve hit your marginal tax rate.
2024-2025 Tax Brackets
Federal income tax brackets are adjusted by the IRS each year to take inflation into account.
| Tax Rate | Single | Married Filing Separately | Head Of Household | Married Filing Jointly |
|---|---|---|---|---|
| 10% | Not over $11,925 | Not over $11,925 | Not over $17,000 | Not over $23,850 |
| 12% | Over $11,925 but not over $48,475 | Over $11,925 but not over $48,475 | Over $17,000 but not over $64,850 | Over $$23,850 but not over $96,950 |
| 22% | Over $48,475 but not over $103,350 | Over $48,475 but not over $103,350 | Over $64,850 but not over $103,350 | Over $96,950 but not over $206,700 |
| 24% | Over $103,350 but not over $197,300 | Over $103,350 but not over $197,300 | Over $103,350 but not over $197,300 | Over $206,700 but not over $394,600 |
| 32% | Over $197,300 but not over $250,525 | Over $197,300 but not over $250,525 | Over $197,300 but not over $250,500 | Over $394,600 but not over $501,050 |
| 35% | Over $250,525 but not over $626,350 | Over $250,525 but not over $375,800 | Over $250,500 but not over $626,350 | Over $501,050 but not over $751,600 |
| 37% | Over $626,350 | Over $375,800 | Over $626,350 | Over $751,600 |
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How Do I Lower My Tax Bracket?
- Contribute to a traditional individual retirement account (IRA).
- Itemize your tax deductions if you have qualified expenses.
- Participate in your company’s 401(k) plan.
- Contribute to a health savings account (HSA) if you are eligible.
- Deduct any capital losses for the taxable year.
- Report qualified student loan interest paid for the year.
- Stash money away into a flexible spending account at your workplace.
What Is a Marginal Tax Rate?
Your marginal tax rate is the highest tax bracket that corresponds to your taxable income and filing status. Determining your marginal tax rate can be a simple process, but first, you must figure out your taxable income.
You can determine your taxable income by adding up all of your reportable income and subtracting certain tax deductions and adjustments including:
- The standard deduction or itemized deductions
- Retirement savings contributions
- Student loan interest
- Penalties for early withdrawals from CDs (certificates of deposit)
After tallying up your taxable income, you can pinpoint your marginal tax rate. Just use the calculator or tables above.
