How Many Different Tax Brackets Are in the Federal Tax System?

The United States federal tax system is a progressive system, meaning individuals with higher taxable incomes are subject to higher tax rates. This structure is built upon a framework of seven distinct tax brackets. The existence of these brackets ensures that not all income is taxed at the same rate, a concept for understanding an individual’s annual tax obligations.

The Seven Federal Income Tax Brackets

A tax bracket represents a range of income that is subject to a specific tax rate. The U.S. employs a marginal tax rate system, meaning you do not pay your top tax rate on every dollar you earn. Instead, your income fills up each bracket in succession, and only the portion of income within a particular bracket is taxed at that bracket’s rate. This prevents a large jump in tax liability simply for earning a few dollars more and crossing into a higher bracket.

For the 2024 tax year, the income tax rates are 10%, 12%, 22%, 24%, 32%, 35%, and 37%. Every filer will pay 10% on their initial dollars of taxable income. As income rises, it moves into the next bracket, and that segment of income is taxed at the corresponding higher rate.

This tiered approach means a person considered to be “in” the 22% bracket does not pay 22% on their entire income. They pay 10% on the first portion of their income, 12% on the next portion, and finally 22% only on the amount of income that falls within that 22% range. This method ensures a gradual increase in the overall tax paid as income grows.

How Filing Status Affects Bracket Ranges

While the seven tax rates are consistent for all taxpayers, the income ranges for these brackets are determined by a taxpayer’s filing status. The Internal Revenue Service (IRS) specifies different bracket thresholds for four filing statuses: Single, Married Filing Jointly, Married Filing Separately, and Head of Household. These statuses are based on marital status and family situation at the end of the tax year.

For the 2024 tax year, a Single filer will pay 10% on taxable income up to $11,600. The 12% rate applies to income from $11,601 to $47,150, and the 22% rate applies to income from $47,151 to $100,525. The ranges continue to climb through the 24%, 32%, 35%, and 37% brackets, with the top rate applying to income over $609,350.

For those who are Married Filing Jointly, the bracket ranges are double those for Single filers, reflecting the combined income of two people. The 10% bracket for 2024 covers taxable income up to $23,200. The 12% bracket extends up to $94,300, and the 22% bracket goes up to $201,050. The highest rate of 37% applies to joint taxable income exceeding $731,200.

The Head of Household status is for unmarried individuals who pay for more than half of the household expenses for a qualifying person. These bracket ranges are more favorable than the Single status. For 2024, the 10% rate applies to income up to $16,550, and the 12% rate applies to income between $16,551 and $63,100. The Married Filing Separately status has brackets that are half of the Married Filing Jointly ranges.

Calculating Your Federal Income Tax

Calculating your federal income tax begins with determining your taxable income. This figure is your gross income after certain adjustments and deductions have been subtracted. The most common deduction is the standard deduction, which for 2024 is $14,600 for Single filers and $29,200 for those Married Filing Jointly. Taxpayers can choose to itemize deductions if their total itemized expenses exceed the standard deduction amount.

Once taxable income is established, you apply the marginal rates to the portions of income that fall into each bracket for your filing status. For example, consider a Single filer with a taxable income of $50,000 in 2024. This person is in the 22% marginal tax bracket.

The first $11,600 of their income is taxed at 10%, for a tax of $1,160. The next portion of income, from $11,601 to $47,150 ($35,550), is taxed at the 12% rate, which equals $4,266. The final portion of income, from $47,151 to $50,000 ($2,850), falls into the 22% bracket, resulting in $627 of tax.

The total federal income tax liability is the sum of these amounts. Adding $1,160, $4,266, and $627 results in a total tax of $6,053.