How Marginal Brackets Work
The U.S. uses a progressive marginal tax system. Each dollar is taxed at the rate for the bracket it falls into — not one flat rate on everything.
Example (Single, $60,000 taxable income):
- First $11,925 at 10% = $1,193
- Next $36,550 ($11,926–$48,475) at 12% = $4,386
- Remaining $11,525 ($48,476–$60,000) at 22% = $2,536
- Total tax: $8,115 (effective rate: 13.5%)
2025 Bracket Tables
Single
| Taxable Income | Rate |
|---|---|
| $0 – $11,925 | 10% |
| $11,926 – $48,475 | 12% |
| $48,476 – $103,350 | 22% |
| $103,351 – $197,300 | 24% |
| $197,301 – $250,525 | 32% |
| $250,526 – $626,350 | 35% |
| Over $626,350 | 37% |
Married Filing Jointly / Qualifying Surviving Spouse
| Taxable Income | Rate |
|---|---|
| $0 – $23,850 | 10% |
| $23,851 – $96,950 | 12% |
| $96,951 – $206,700 | 22% |
| $206,701 – $394,600 | 24% |
| $394,601 – $501,050 | 32% |
| $501,051 – $751,600 | 35% |
| Over $751,600 | 37% |
Married Filing Separately
| Taxable Income | Rate |
|---|---|
| $0 – $11,925 | 10% |
| $11,926 – $48,475 | 12% |
| $48,476 – $103,350 | 22% |
| $103,351 – $197,300 | 24% |
| $197,301 – $250,525 | 32% |
| $250,526 – $375,800 | 35% |
| Over $375,800 | 37% |
Head of Household
| Taxable Income | Rate |
|---|---|
| $0 – $17,000 | 10% |
| $17,001 – $64,850 | 12% |
| $64,851 – $103,350 | 22% |
| $103,351 – $197,300 | 24% |
| $197,301 – $250,500 | 32% |
| $250,501 – $626,350 | 35% |
| Over $626,350 | 37% |
Capital Gains Rates
Long-term capital gains (assets held over one year) and qualified dividends are taxed at preferential rates:
| Filing Status | 0% Rate | 15% Rate | 20% Rate |
|---|---|---|---|
| Single | Up to $48,350 | $48,351 – $533,400 | Over $533,400 |
| MFJ | Up to $96,700 | $96,701 – $600,050 | Over $600,050 |
| HOH | Up to $64,750 | $64,751 – $566,700 | Over $566,700 |
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PaisaTax uses the Qualified Dividends and Capital Gain Tax Worksheet (QDCGT) automatically when the return includes long-term gains or qualified dividends. This calculation happens on Form 1040 Line 16 and typically results in lower tax than applying ordinary rates.
Additional Taxes on High Earners
Beyond the bracket rates, high-income taxpayers may owe:
| Tax | Rate | Threshold (Single) | Threshold (MFJ) |
|---|---|---|---|
| Additional Medicare (Form 8959) | 0.9% | $200,000 | $250,000 |
| Net Investment Income (Form 8960) | 3.8% | $200,000 | $250,000 |
| Alternative Minimum Tax (Form 6251) | 26%/28% | Varies | Varies |