Federal income tax is not one flat rate — it's a system of brackets where you pay different percentages on different portions of your income
The federal government taxes your income using tax brackets, not a single percentage. If you earn $50,000, you don't pay the same rate on every dollar. Instead, you pay a lower rate on the first portion of your income and a higher rate on the portion above a certain threshold. The rate that applies to your last dollar earned is called your marginal tax rate. Your effective tax rate — the average percentage of your total income that goes to federal tax — is always lower than your marginal rate.
For 2024, there are seven federal tax brackets for single filers, ranging from 10% on the lowest income to 37% on the highest. The exact income ranges that fall into each bracket change every year based on inflation. Married couples filing jointly have different bracket thresholds than single filers, and head of household filers have their own brackets as well.
Key Takeaways
- Federal tax brackets mean you pay 10%, 12%, 22%, 24%, 32%, 35%, or 37% depending on which portion of your income falls into each bracket, not one rate on all your income.
- Your marginal rate is the percentage you pay on your last dollar; your effective rate is your total tax divided by your total income, and it's always lower.
- Tax bracket thresholds change each year and differ based on whether you file as single, married filing jointly, married filing separately, or head of household.
- Standard deductions and tax deductions reduce the income that actually gets taxed, which is why two people earning the same gross income may owe different amounts.
The seven federal tax brackets for 2024
The IRS sets seven tax brackets each year. For 2024, if you file as single, the brackets are:
| Tax Rate | Income Range (Single Filers) |
|---|---|
| 10% | $0 to $11,600 |
| 12% | $11,601 to $47,150 |
| 22% | $47,151 to $100,525 |
| 24% | $100,526 to $191,950 |
| 32% | $191,951 to $243,725 |
| 35% | $243,726 to $609,350 |
| 37% | $609,351 and above |
If you file as married filing jointly, the income ranges are wider — you reach the 12% bracket at $23,200 instead of $11,600, for example. Head of household filers have their own thresholds, and married filing separately filers have the narrowest brackets. The IRS adjusts all these numbers annually for inflation, so the ranges you see in 2025 will be different from 2024.
How tax brackets actually work with an example
Suppose you're a single filer earning $60,000 in 2024. You don't pay 22% on all $60,000. Instead, you pay 10% on the first $11,600, then 12% on the income from $11,601 to $47,150, then 22% on the income from $47,151 to $60,000. That's $1,160 plus $4,266 plus $2,847, which totals $8,273 in federal tax. Your effective rate is $8,273 divided by $60,000, or about 13.8% — much lower than the 22% bracket you're in.
Your marginal rate of 22% tells you what you'll pay on any additional income you earn. If you earn one more dollar, you pay 22 cents in federal tax on it. But that doesn't change what you already owe on the first $60,000.
Deductions reduce the income that gets taxed
Your taxable income — the amount the IRS actually applies tax brackets to — is lower than your gross income because of deductions. Everyone gets a standard deduction, which is a flat amount you can subtract from your income before tax brackets apply. For 2024, the standard deduction is $14,600 for single filers and $29,200 for married couples filing jointly. If you're 65 or older, you get an additional deduction.
So if you earn $60,000 as a single filer, your taxable income is $60,000 minus $14,600, or $45,400. The tax brackets apply to $45,400, not $60,000. This is why two people earning the same gross income can owe different amounts: one might itemize deductions (mortgage interest, charitable donations, state taxes) instead of taking the standard deduction, while the other takes the standard deduction.
Self-employment income and additional taxes
If you're self-employed, you owe federal income tax on your net business income using the same brackets as everyone else. But you also owe self-employment tax, which is 15.3% on 92.35% of your net earnings — this covers Social Security and Medicare. Self-employment tax is separate from federal income tax and is calculated on Schedule SE, not on your main tax return.
Employees have Social Security and Medicare taxes withheld from their paychecks (7.65% combined), and their employer pays an equal amount. Self-employed people pay both sides, which is why self-employment tax is higher. This additional tax is not part of the federal income tax brackets, but it does add to your total federal tax burden.
Tax withholding and what comes out of your paycheck
Your employer withholds federal income tax from each paycheck based on the W-4 form you fill out. The withholding is an estimate of what you'll owe at the end of the year. If too much is withheld, you get a refund; if too little is withheld, you owe more when you file. The withholding calculation uses the tax brackets and your filing status, but it's not the same as your actual tax liability — it's just an advance payment.
The amount withheld depends on your income, how often you're paid, and the number of dependents and other adjustments you claim on your W-4. If you have a second job, side income, or a spouse who also works, you may need to adjust your withholding to avoid owing a large amount in April.
State and local income taxes are separate
Federal income tax is only one layer. Most states also have their own income tax, with their own brackets and rates. Some states have no income tax at all (Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming). Local taxes in some cities and counties add another layer. Your paycheck may have federal, state, and local taxes all withheld, and each uses its own rate structure.
The federal brackets described here apply only to federal income tax. When you see your pay stub, the line for federal withholding is separate from state and local withholding, and they're calculated independently.
Frequently Asked Questions
If I'm in the 24% tax bracket, do I pay 24% on all my income?
No. The 24% bracket applies only to the portion of your income that falls within that range. You pay 10% on the lowest portion, 12% on the next portion, 22% on the next portion, and only 24% on the income above the 24% bracket threshold. Your effective rate — the average across all your income — is much lower than 24%.
Do tax brackets change every year?
Yes. The IRS adjusts the income ranges for each bracket annually to account for inflation. The rates themselves (10%, 12%, 22%, etc.) stay the same, but the dollar amounts that trigger each rate move up each year. You can find the current year's brackets on the IRS website or from your tax software.
How do I know what my effective tax rate is?
Divide your total federal income tax by your total income. If you owed $8,000 on $60,000 of income, your effective rate is about 13.3%. This is different from your marginal rate, which is the rate on your last dollar earned. Your effective rate is always lower because you pay lower rates on the first portions of your income.
Does the standard deduction lower my tax bracket?
The standard deduction lowers your taxable income, which can move you into a lower bracket or reduce the amount of income subject to your current bracket. If you earn $60,000 and take the $14,600 standard deduction, you're taxed on $45,400 instead. This means less of your income is subject to higher brackets.
What's the difference between federal and state income tax rates?
Federal income tax uses the seven brackets set by the IRS and applies nationwide. State income tax rates and brackets vary by state — some states have no income tax, others have a flat rate, and others have their own bracket system. Both are withheld from your paycheck separately and calculated independently.