Tax Bracket

How It Works

Tax brackets define the income ranges and corresponding rates in the U.S. progressive tax system. For 2025, there are seven brackets with rates of 10%, 12%, 22%, 24%, 32%, 35%, and 37%. The bracket thresholds differ by filing status, married filing jointly thresholds are roughly double those for single filers, while head of household falls in between. The IRS adjusts bracket thresholds annually for inflation, which prevents "bracket creep" where inflation pushes taxpayers into higher brackets without real income gains. In 2025, the thresholds increased by about 2.8% from the prior year. Each bracket is like a bucket that fills up sequentially. Your first dollars of taxable income fill the 10% bucket, then overflow into the 12% bucket, and so on. Only the income within each bucket is taxed at that bucket's rate. This is why moving into a "higher tax bracket" doesn't retroactively raise the rate on all your income, it only affects income above the threshold. Bracket planning is a core tax strategy: timing income and deductions to stay in lower brackets can save thousands over a lifetime. Many taxpayers aim to "fill up" their current bracket with Roth conversions or capital gain harvesting before year-end.

Tax Bracket is one of the tax-code concepts that recurs across TaxCompare. The definition above is the technical answer; below is the practical context for how it shows up in the state-vs-state comparisons that drive the site.

In the tax-comparison engine, this concept feeds either the federal calculation (IRS Revenue Procedures) or the state calculation (Tax Foundation state-tax database). The methodology page describes which inputs flow into each piece of the model.