Each tax rate applies to a specific range of income referred to as a “tax bracket.” Where each tax bracket begins and ends depends on your filing status. Charts below show which tax rates apply to which filing status and taxable income amount. Remember: Taxable income is what’s left after you claim various deductions.
How Tax Rates Work
The circumstances of your life determine your filing status, such as whether you’re married, single, or have children or other dependents. Tax rates can also vary, depending on the type of income being taxed. Ordinary tax rates apply to most incomes, but a separate tax rate schedule applies to income derived from long-term capital gains. It’s important to note that the bracket you fall into is not the rate applied to all of the income you earn. For example, if your taxable income is $50,000 and you’re a single filer, you fall into the 22% bracket. But that 22% rate is only applied to the amount of income you earned over the lower threshold for that tax rate and the tax year. For the tax year 2022, you’d pay 22% on income over $41,775. The 12% rate would be applied to your income that falls between $10,275 and $41,775, and the 10% rate is applied to the remainder of your income that is less than $10,275. This is how graduated tax rates work; they apply to all filers. When you know which bracket you fall into, you can determine how much you’ll be taxed on additional income, like from a second job or side gig, until that income reaches the next bracket. This is also called your “marginal tax rate.” If you’re single, and your taxable income is $50,000, your marginal rate is 22%. You can also use tax rates to figure out how much tax you’ll save by increasing your deductions. A taxpayer in the 24% tax bracket will save $0.24 in federal tax for every $1 spent on a tax-deductible expense if they itemize.
Income Tax Rates for Single Filers
Income Tax Rates for Heads of Household
Income Tax Rates for Married Taxpayers Filing Separately
Income Tax Rates for Married Taxpayers Filing Jointly
Each Tax Rate Applies to a Portion of Income
As mentioned above, your marginal tax rate—the bracket that your income amount falls into—is not applied to all of your earned income. This tax rate chart shows how the mechanics of this work.
$1,027.50 + $4,807.50 + $9,811 + $3,270 = $18,916
So, if your taxable income is $100,000, and you’re a single filer, you would owe the IRS $18,916 before any tax deductions or tax credits. Note that while your marginal tax rate is 24% in this example, your average tax rate is actually about 19% ($18,916 / $100,000 = 0.189 = 19%).
Capital Gains Tax Rates
Long-term capital gains result from the sale of property you’ve held for more than one year, such as a stock portfolio, while short-term capital gains result from assets you’ve owned for one year or less and are taxed as ordinary income. Long-term capital gains have their own tax brackets to determine how they are taxed. These income spans apply to your overall income, including both capital gains and ordinary income. The long-term capital gains tax rates for single filers for the 2022 tax year are:
Married filing jointly or qualifying widow(er) with dependent child: $250,000 or moreSingle or head of household: $200,000 or moreMarried filing separately: $125,000 or more
Social Security Tax Rates
Another tax that probably applies to your income is the Social Security tax. The Social Security tax rate is 12.4% on wages (you pay half, and your employer pays half) up to the Social Security wage base, which is $147,000 in 2022. Anything above the wage base amount is not subject to Social Security tax. The maximum Social Security tax paid by employees is $9,114 for the tax year 2022, or 6.2% of $147,000. Self-employed filers pay the full 12.4%, for a maximum of $18,228 for tax year 2022. This wage base is adjusted annually to keep up with inflation. For the 2023 tax year, the wage base for the Social Security tax is $160,200.
Medicare Tax Rates
The Medicare tax rate is 2.9% on wages and self-employment income. There’s no wage base for this tax—all ordinary income is taxed at that rate. Employees pay half (1.45%) and employers pay the other half (1.45%). Self-employed individuals pay the whole 2.9%. The Additional Medicare Tax rate is 0.9% on wages and self-employment income, but it’s only applicable to incomes over $200,000. Employers don’t have to match any portion of this tax.
