Use some key steps and the 2026 individual tax brackets to help you figure out your taxable income and get the most from possible credits and deductions.
Quick takeaways
Whether you're planning ahead or just want to better understand your paycheck, we'll walk you through the 2026 federal income tax brackets and break down how the U.S. tax system affects your wallet. Plus, discover ways to keep more of what you earned.
You can figure out your federal income taxes by knowing both your taxable income and the most current year tax brackets. (More on that below.) The definition of taxable income is fairly straightforward; calculating it is more difficult.
Taxable income is simply any gross income you make—everything from a salary to freelance income, interest, dividends, and more—minus your personal deductions and credits. (Note that some income is not taxed, such as monetary gifts up to $19,000 for 2026, as well as inheritances up to certain maximum levels.) The most common personal deduction is the standard deduction (established by the IRS) or mortgage interest. An example of a personal credit is the earned income tax credit. A tax advisor can offer guidance specific to your situation.
| Filing status | Deduction |
|---|---|
| Single and married filing separately | $16,100 |
| Married filing jointly | $32,200 |
| Head of household | $24,150 |
A key feature of the federal income tax structure is that it’s progressive: The more income you make, the more tax you theoretically pay. It’s also graduated; you pay higher tax rates on higher levels of income. Your federal tax bracket also depends on your filing status—married versus single, for example. There are seven federal tax brackets, and they are typically adjusted annually for inflation.
| Tax rate | Single filers, taxable income | Married, filing jointly, taxable income | Married, filing separately, taxable income | Head of household, taxable income |
|---|---|---|---|---|
| 10% | $0 to $12,400 | $0 to $24,800 | $0 to $12,400 | $0 to $17,700 |
| 12% | $12,401 to $50,400 | $24,801 to $100,800 | $12,401 to $50,400 | $17,701 to $67,450 |
| 22% | $50,401 to $105,700 | $100,801 to $211,400 | $50,401 to $105,700 | $67,451 to $105,700 |
| 24% | $105,701 to $201,775 | $211,401 to $403,550 | $105,701 to $201,775 | $105,701 to $201,775 |
| 32% | $201,776 to $256,225 | $403,551 to $512,450 | $201,776 to $256,225 | $201,776 to $256,200 |
| 35% | $256,226 to $640,600 | $512,451 to $768,700 | $256,226 to $384,350 | $256,201 to $640,600 |
| 37% | $640,601 or more | $768,701 or more | $384,351 or more | $640,601 or more |
Here’s an example of how the progressive, graduated federal tax system works. Let’s say you are single and your taxable income is $65,000. You don’t pay 22% on all your income. Instead, you pay different income tax on different groups of income:
- 10% on $12,400 = $1,240
- 12% on $38,000 = $4,560
- 22% on $14,600 = $3,212
- Total federal income tax due = $9,012
The actual federal income tax percent on that taxable income of $65,000 is 13.9% ($65,000*13.9% = $9,012); it’s referred to as your effective tax rate. The highest federal tax rate you owe is what’s called your federal marginal tax rate; in this case it’s 22%.
Depending on your payroll withholdings throughout the year, you may have already paid much of that federal income tax. If you’ve paid too much, you’re owed a refund; too little, and you’ll owe taxes when you file your tax return.
If you received a refund, it may be worth it to talk with your tax advisor to ensure your payroll withholdings match your expected federal income tax. That’s money you could use throughout the year, instead of waiting to receive it as a tax refund.
If you ended up owing federal taxes last year, a meeting with your tax advisor can also help to review some ways to reduce that tax bill. See more on that below.
Reducing your taxable gross income can have a meaningful effect on the federal income tax you pay. Here are three things to consider:
- Credits and deductions: Are you taking all that you’re eligible for?
- Withholdings: Should you change what you put aside each paycheck?
- Health savings and retirement account contributions: Can you boost these to reduce your taxable income?
Health savings accounts, also called HSAs, are a triple tax-advantaged savings account for your qualified medical expenses. A 401(k), or employer-sponsored retirement plan, enables you to set aside a portion of your income before it’s taxed. Both are typically payroll deductions, which reduce your gross income, and therefore the income tax that you need to pay.
There are also other options for reducing your taxable gross income, such as tax loss harvesting and delayed income. Consult your tax advisor for specifics related to your situation.
Federal income taxes and FICA, or payroll taxes, are both deducted from your paycheck, but the two fund different things. Payroll taxes appear as “FICA Social Security tax” and “FICA Medicare,” and help pay for Social Security and Medicare, while federal income taxes help pay for government programs and operations.
How can you maximize retirement savings and maximize the tax advantages of putting funds aside for those years? Watch a replay of our webinar, Maximize your 401(k), to discover strategies, tax benefits, choosing investments, and more.
