Tax Bracket
An income range to which a specific tax rate applies under a progressive tax system.
What is Tax Bracket?
A tax bracket is a range of income to which a specific marginal tax rate applies under a progressive income tax system. The US federal income tax has seven brackets (10%, 12%, 22%, 24%, 32%, 35%, and 37% as of 2025), with higher rates applying only to income above each bracket's threshold. A common misconception is that moving into a higher bracket taxes all income at that higher rate — in reality, only the income above the threshold is taxed at the higher rate. For example, earning $1 more than a bracket threshold means only that $1 (not all income) is taxed at the higher rate. Brackets are adjusted annually for inflation.
Example
For a single filer in 2025, the first $11,925 of taxable income is taxed at 10%, income from $11,925–$48,475 at 12%, income from $48,475–$103,350 at 22%, and so on. A person with $60,000 of taxable income does not pay 22% on all $60,000 — they pay 10%, 12%, and 22% on the respective portions of their income.