If you’re a U.S. investor, understanding how federal income tax brackets work may give you a clearer picture of how your income is taxed. Whether you’re reviewing your year-end investment earnings, planning your retirement contributions, or simply trying to get a handle on your tax situation, it helps to know where your income falls within the current brackets. This guide explains how the 2025–26 federal income tax rate brackets are structured, how the progressive tax system works, and what it means for your taxable income.
2025-26 Federal income tax rate brackets explained
Table of Contents
How the U.S. Federal income tax system works
The United States uses a progressive federal income tax system. This means that as your taxable income increases, the rate at which each additional portion of your income is taxed also increases. However, not all of your income is taxed at the same rate. Instead, different portions of your income are taxed at different rates, depending on which tax bracket they fall into.
Marginal vs. Effective tax rate
Marginal tax rate: This is the rate you pay on your last dollar of taxable income. For example, if you’re in the 22% tax bracket, only the portion of your income that falls within that bracket is taxed at 22%.
Effective tax rate: This is your average tax rate, calculated as the total tax you pay divided by your total taxable income. Because of the progressive system, your effective tax rate is usually lower than your marginal rate.
2025 Federal income tax brackets (For taxes filed in 2026)
The IRS adjusts tax brackets annually for inflation. For the 2025 tax year (taxes filed in 2026), there are seven federal income tax brackets: 10%, 12%, 22%, 24%, 32%, 35%, and 37%, but the income ranges have shifted slightly upward.
Here’s how the brackets break down by filing status:
| Tax Rate | Single Filers | Married Filing Jointly | Married Filing Separately | Head of Household |
| 10% | $0 – $11,925 | $0 – $23,850 | $0 – $11,925 | $0 – $17,000 |
| 12% | $11,926 – $48,475 | $23,851 – $96,950 | $11,926 – $48,475 | $17,001 – $64,850 |
| 22% | $48,476 – $103,350 | $96,951 – $206,700 | $48,476 – $103,350 | $64,851 – $103,350 |
| 24% | $103,351 – $197,300 | $206,701 – $394,600 | $103,351 – $197,300 | $103,351 – $197,300 |
| 32% | $197,301 – $250,525 | $394,601 – $501,050 | $197,301 – $250,525 | $197,301 – $250,500 |
| 35% | $250,526 – $626,350 | $501,051 – $751,600 | $250,526 – $375,800 | $250,501 – $626,350 |
| 37% | $626,351 or more | $751,601 or more | $375,801 or more | $626,351 or more |
Source: IRS
Standard deduction for 2025
For the 2025 tax year (taxes filed in 2026), the standard deduction amounts are as follows:
| Filing Status | Standard Deduction (2025) |
| Single | $15,000 |
| Married Filing Jointly | $30,000 |
| Married Filing Separately | $15,000 |
| Head of Household | $22,500 |
Source: IRS
Additional standard deduction for age or blindness:
- If you are 65 or older or blind, you can add:
- $2,000 if single or head of household
- $1,600 if married (per qualifying spouse)
For dependents filing their own return:
- The standard deduction is the greater of $1,350 or earned income plus $450, but not more than the basic standard deduction for their filing status.
These figures reflect the most recent IRS inflation adjustments for the 2025 tax year.
How to determine your 2025 tax bracket
Your tax bracket for 2025 is based on your taxable income and your filing status (such as single, married filing jointly, married filing separately, or head of household). Taxable income is calculated by taking your gross income and subtracting deductions and adjustments, like contributions to retirement accounts, health savings accounts, and either the standard deduction or itemized deductions.
Example: Calculating your 2025 tax bracket
Suppose you are a single filer with a taxable income of $75,000 in 2025. Here’s how your income would be taxed under the current brackets:
- The first $11,925 is taxed at 10%
- The next $36,550 ($48,475 – $11,925) is taxed at 12%
- The remaining $26,525 ($75,000 – $48,475) is taxed at 22%
This means you do not pay 22% on your entire $75,000. Instead, only the portion of your income that falls within each bracket is taxed at that bracket’s rate. The progressive tax system ensures that as your income increases, only the amount above each bracket threshold is taxed at the higher rate.
How to track taxable investment income with Public.com
Public is designed in a way that may help you manage and diversify your investments across stocks, bonds, ETFs, crypto, and more—all in one place. Any taxable events that occur in your Public account, such as dividends, realized capital gains, or profits from selling crypto assets, are clearly documented and can be easily accessed for tax reporting. Public’s platform also offers:
- Automated tax documents: You’ll receive the necessary tax forms (like 1099s) for your investment activity, simplifying the process of reporting your investment income to the IRS.
- Capital gains calculator: This tool helps you quickly calculate your gains and potential tax liability, so you’re never left guessing at tax time.
- IRA options: You can choose between a Traditional or Roth IRA on Public, and even benefit from a 1% match on annual contributions, which may help you grow your retirement savings while staying organized for tax season.
- Fractional investing and multi-asset access: Public gives you the ability to invest in fractions of bonds, which may make it easier to build a diversified portfolio and track all your taxable events in one place.
- AI-Powered insights: With features like Alpha, Public delivers real-time analysis and insights, that may help you understand the tax implications of your investment choices.
Conclusion
Tax brackets are a fundamental part of the U.S. tax system, and understanding how they work may help you make sense of your annual tax return. As an investor, you may have multiple sources of income, and knowing how different types of income are taxed can be helpful as you plan for the future.
Staying informed about tax brackets and how they affect your taxable income can help you better understand your overall tax situation as you navigate the tax year.