Tax Brackets 

2024-2025 Tax Brackets and Federal Income Tax Rates

There are seven income tax rates and brackets, ranging from 10% to 37%. Depending on your income a person will fall into one of these brackets.

Federal tax brackets are a system used to determine how much income tax you owe to the federal government. The U.S. uses a progressive tax system, meaning the rate you pay increases as your income increases. Your income is taxed in portions (brackets), not the entire amount, so you don't pay the highest tax rate on your full income.

As stated, not all of your income is taxed at the highest rate you qualify for. Instead, income is taxed in "brackets," each at a different rate. The table below is based on your adjusted gross income.

Adjusted Gross Income (AGI), is a tax term used by the IRS to determine your taxable income. It represents your total gross income (wages, interest, dividends, capital gains, business income, etc.) minus certain adjustments (such as student loan interest, retirement contributions, IRA contributions, etc.). Gross income and adjusted gross income

Example: 2024 tax rate

An individual (single) filer with an AGI of $50,000. Here’s how it would break down using the tax brackets:

    First $11,600: Taxed at 10% = $1,160

    Next $35,549 (from $11,601 to $47,150): Taxed at 12% = $4,266

    Remaining $2, 851 (from $47,151 to $50,000): Taxed at 22% = $627

Total tax owed = $1,160 + $4,266 + $627 = $6,053 in federal income tax