What Happened to the 33 Percent Federal Tax Bracket?

The United States uses a progressive tax system, where higher portions of an individual’s income are subject to higher tax rates. This structure is organized into income ranges known as tax brackets, each with a corresponding percentage. A common misunderstanding is that all of a person’s income is taxed at their highest bracket’s rate. Instead, different portions of income are taxed at different rates as they cross the thresholds into higher brackets. The laws governing these brackets can be altered by new legislation, which can change how much tax individuals owe.

The Former 33 Percent Federal Tax Bracket

The 33 percent federal income tax bracket was eliminated by the Tax Cuts and Jobs Act of 2017 (TCJA), which restructured individual income tax rates starting with the 2018 tax year. Before its elimination, the 33 percent bracket applied to a significant portion of upper-middle-income earners. In its final year, 2017, the income thresholds for this bracket varied by filing status.

For a single individual, this rate applied to taxable income between $191,651 and $416,700, while for those married and filing a joint return, it covered income between $233,351 and $416,700. Heads of household faced the 33 percent rate on income from $212,501 up to $416,700. The individual tax rates established by the TCJA are set to expire at the end of 2025. If Congress does not act to extend them, the previous bracket structure, including the 33 percent rate, is scheduled to return in 2026.

Current Federal Income Tax Brackets

The Tax Cuts and Jobs Act of 2017 established the current seven-bracket income tax structure. These seven rates are 10%, 12%, 22%, 24%, 32%, 35%, and 37%. Each year, the income thresholds for these brackets are adjusted to account for inflation, a process known as indexation. This adjustment helps prevent “bracket creep,” where inflation, rather than an increase in real income, pushes a taxpayer into a higher bracket.

For the 2025 tax year, the income thresholds for each filing status have been set by the IRS. For single filers, the brackets range from the 10% rate on income up to $11,925 to the 37% rate on income over $626,350. For married individuals filing jointly, the 10% bracket applies to income up to $23,850, while the top 37% rate applies to income over $751,600.

The income ranges for heads of household start at $17,000 for the 10% bracket and reach the 37% bracket for income over $626,350. Lastly, for those who are married but file separately, the brackets mirror those for single filers, with the 37% rate applying to income over $375,800.

Calculating Your Tax Liability

To illustrate how the bracket system works, consider a single individual with a taxable income of $100,000 for the 2025 tax year. Their income spans three different tax brackets. The first $11,925 of their income is taxed at the 10% rate, resulting in $1,192.50 of tax. The next portion of their income, from $11,926 up to $48,475, is taxed at the 12% rate, for a tax of $4,386.

The remaining portion of their income, from $48,476 up to $100,000, falls into the 22% bracket, which equals $11,335.50. The taxpayer’s total federal income tax liability is the sum of these amounts: $1,192.50 + $4,386 + $11,335.50 = $16,914.

This calculation highlights the difference between a marginal and an effective tax rate. The taxpayer’s marginal tax rate is 22%, as that is the rate applied to their last dollar of income. Their effective tax rate, the total tax paid divided by total taxable income, is approximately 16.9% ($16,914 divided by $100,000).