Tax Brackets

Lesson

In this lesson, you’ll learn how tax brackets determine how much you must pay in taxes. There will be a short quiz at the end of this lesson to make sure you understand the material before moving onto the next lesson.

The United States income tax system is referred to as a “progressive” system. This means that people with higher incomes must pay a larger percentage of their income toward income taxes while people with lower incomes must pay a smaller percentage of their income toward income taxes. Tax brackets are income ranges that determine how much income tax you’re required to pay.

2022 Tax Brackets

In 2022, there are 7 federal income tax brackets. Each tax bracket specifies income ranges for people who are: 

  • Single: unmarried and living alone
  • Head of household: unmarried and supporting family members
  • Married: married and filing a joint tax return with a spouse
Tax RateSingleHead of HouseholdMarried Filing Jointly
10%$0 to $10,275$0 to $14,650$0 to $20,550
12%$10,275 to $41,775$14,650 to $55,900$20,550 to $83,550
22%$41,775 to $89,075$55,900 to $89,050$83,550 to $178,150
24%$89,075 to $170,050$89,050 to $170,050$178,150 to $340,100
32%$170,050 to $215,950$170,050 to $215,950$340,100 to $431,900
35%$215,950 to $539,900$215,950 to $539,900$431,900 to $647,850
37%$539,900 or more$539,900 or more$647,850 or more

Tax Bracket Example

If your income places you into a higher tax bracket, you’ll be charged at multiple rates. For example, Jack and Jill are married and file a joint return. Together, they make $100,000 a year. Jack and Jill will be charged at the 10, 12, and 22 percent tax brackets:

  • 10 percent of their first $20,550 or $2055
  • 12 percent of their next $63,000 or $7560
  • 22 percent of the remaining $16,450 or $3619
  • Total: $13,234

Jack and Jill may be able to  claim tax credits and tax deductions, though, to reduce the taxes they owe.

State Tax Brackets

Not all states collect income taxes, but those that do use tax bracket systems with their own tax brackets. You can learn how taxes work in your state by visiting your state’s official web site and searching for the state agency that administers taxes in your state. This is often called the department of revenue or something similar with revenue in the name.

Quiz

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