The single most common misunderstanding about US tax is that earning more can leave you worse off. It cannot, and here is why.
US federal income tax is marginal. That word does most of the work in understanding it.
Each rate applies only to the income within that band, not to your whole income.
Take a single filer earning $60,000 in tax year 2025. They do not pay 22% on $60,000. They pay:
So "I moved into the 22% bracket" never means a pay cut. Only the dollars above the threshold are taxed at the higher rate.
| Rate | Single | Married filing jointly |
|---|---|---|
| 10% | $0 – $11,925 | $0 – $23,850 |
| 12% | $11,926 – $48,475 | $23,851 – $96,950 |
| 22% | $48,476 – $103,350 | $96,951 – $206,700 |
| 24% | $103,351 – $197,300 | $206,701 – $394,600 |
| 32% | $197,301 – $250,525 | $394,601 – $501,050 |
| 35% | $250,526 – $626,350 | $501,051 – $751,600 |
| 37% | $626,351+ | $751,601+ |
| Rate | Single | Married filing jointly |
|---|---|---|
| 10% | $12,400 or less | $24,800 or less |
| 12% | over $12,400 | over $24,800 |
| 22% | over $50,400 | over $100,800 |
| 24% | over $105,700 | over $211,400 |
| 32% | over $201,775 | over $403,550 |
| 35% | over $256,225 | over $512,450 |
| 37% | over $640,600 | over $768,700 |
Before any of that applies, a chunk of income is deducted.
| Filing status | 2025 | 2026 |
|---|---|---|
| Single / married filing separately | $15,750 | $16,100 |
| Married filing jointly | $31,500 | $32,200 |
| Head of household | $23,625 | $24,150 |
A single filer earning $60,000 in 2025 therefore has taxable income of about $44,250 after the standard deduction — which puts the top of their income in the 12% band, not the 22% one.
You take either the standard deduction or itemise, whichever is larger. Most filers take the standard deduction.
The 2025 figures reflect the One, Big, Beautiful Bill Act, which made the seven-rate structure permanent and raised the standard deduction from tax year 2025 onward.
If you are an employee, tax is withheld from every paycheque based on the Form W-4 you filed with your employer. That is an estimate.
At year end you file a return that calculates what you actually owed. The difference is settled:
A large refund is not a windfall. It means you lent money to the government interest-free for up to a year. If your refund is consistently large, adjust your W-4.
Federal income tax is one of several deductions:
A headline federal rate is not your total tax burden.