Federal tax brackets are specific taxable income ranges that dictate what your tax rate is. There are different filing types and different ranges for each one, so to determine your federal tax bracket, you must first know if you’re filing as single, married filing jointly, married filing separately or head of household.

The details of tax bracket income ranges can change annually, so if you’re at the lower or upper end of a range, it’s a good idea to pay attention. The published tax brackets for the next calendar year can always bump you up or down.

What Are the Federal Tax Brackets for 2023?

Take a look at the table below to see the federal tax brackets for the 2023 tax year (the 2023 tax year refers to the taxes you file by April 2024—or October 2024 if you get an extension).

What Are the Federal Tax Brackets for 2024?

The IRS published some updates to the federal tax bracket ranges for 2024, which you can see in the table below. Updates were driven by inflation and other economic factors. The 2024 tax year refers to the taxes you must file by April 2025—or October 2025 if you get an extension.

How Does Your Tax Bracket Impact the Amount of Taxes You Pay?

Your tax bracket is one factor in determining how much federal income tax you may owe. However, it’s not as simple as taking your total income and multiplying it by the rate shown on the above charges. 

First, it’s not your total income as reflected by your W2 or other income document that counts. You must figure out your taxable income, which is your income minus any deductions. 

Second, you don’t pay the indicated tax rate on your entire income. You only pay it on the portion of income that falls within that bracket. 

Let’s consider a hypothetical scenario to understand how this works. Imagine that Mike, who is single, made $109,000 in taxable income for 2023—that’s after he takes all his deductions. If you simply multiplied $109,000 by 24%, you’d think Mike would pay $26,160 in taxes.

However, the calculation actually works like this:

• Mike pays 10% on the first $11,000. That’s $1,100 in taxes.
• He pays 12% on the next $33,725 of income. That’s $4,047 in taxes.
• He pays 22% on the next $50,540 of income. That’s $11,143 in taxes.
• He pays 24% on the rest of his income, which is $13,625. That’s another $3,270 in taxes.

Mike’s total tax burden in this scenario is $19,560.

What Is a Marginal Tax Rate?

The term marginal tax rate refers to the amount of tax you pay on the last dollar you earn. It’s the amount you pay on the top portion of your income—or the highest tax rate you hit based on your income. In Mike’s hypothetical case above, the last $13,625 of his income puts him in the 24% rate tax bracket. His marginal tax rate would be 24%.

Pay Attention to Details to Reduce Your Tax Burden

Understanding your tax bracket is a good step to knowing how much tax you may pay. When you also work to understand tax credits and deduction options, you can reduce your taxable income. That means you pay less in taxes overall. If you’re not sure how to minimize your tax burden, consider working with a tax professional, continuing to educate yourself on tax topics, or using a software program that walks you through the tax filing process