Tax Brackets Explained

How Tax Brackets Work

A tax bracket is a range of income taxed at a specific rate. The United States uses a progressive tax system, meaning higher portions of income are taxed at higher rates. Crucially, only the income within each bracket is taxed at that bracket's rate — not your entire income.

US 2024 Federal Tax Brackets (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%: Over $609,350

Marginal vs. Effective Tax Rate

Your marginal tax rate is the rate on your last dollar of income — the bracket you fall into. Your effective tax rate is the actual percentage of your total income paid in taxes.

For example, if you earn $80,000 as a single filer in 2024, your marginal rate is 22%, but your effective rate is about 14.3%. Here is how the math works:

• First $11,600 at 10% = $1,160
• Next $35,550 at 12% = $4,266
• Remaining $32,850 at 22% = $7,227
• Total tax: $12,653 on $80,000 = 15.8% effective rate

(Note: this is before the standard deduction, which would reduce taxable income further.)

The "Higher Bracket" Myth

A common misconception is that earning more money and moving into a higher bracket means all your income gets taxed at the higher rate. This is false. Only the income above the bracket threshold is taxed at the new rate. Getting a raise that pushes you into the next bracket will never result in less take-home pay.

Strategies to Reduce Your Tax Burden

• Maximize pre-tax contributions to 401(k) or traditional IRA to reduce taxable income.
• Use the standard deduction ($14,600 for single filers in 2024) or itemize if your deductions exceed it.
• Harvest tax losses by selling losing investments to offset capital gains.
• Contribute to an HSA if eligible — it is triple tax-advantaged.

Estimate your tax burden with our tax calculator and plan your finances accordingly.