Tax Bracket Statistics (2026)

The US federal income tax uses seven brackets for tax year 2026: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. The top rate of 37% applies to taxable income above $640,600 for single filers and $768,700 for married couples filing jointly (see the table below).

These are the same seven rates set by the 2017 Tax Cuts and Jobs Act, which the One Big Beautiful Bill Act made permanent in 2025. The dollar thresholds are indexed to inflation each year, so they rose about 2.3% to 4% for 2026 depending on the bracket.

The single most misunderstood fact about tax brackets is that they are marginal. Being "in the 24% bracket" does not mean you pay 24% on every dollar. Each rate applies only to income within that band, so your effective (average) rate is always lower than your top marginal rate (see the chart below).

The gap is large. In tax year 2023 the overall average effective income tax rate was just 14.1%, even though most workers sit in the 22% or 24% marginal bracket. The top 1% paid an average of 26.3%, well under the 37% statutory top rate.

Brackets apply to taxable income, which is your income after the standard deduction (or itemized deductions). For 2026 the standard deduction is $16,100 for single filers and $32,200 for married couples, so a couple pays 0% on their first $32,200 of income before the 10% bracket even begins (see the table below).

Because the deduction is so large, a married couple can earn well over $100,000 and still have most of their income taxed at 10% or 12%. The 22% bracket for a couple does not start until taxable income passes $100,800.

Federal income taxes are highly concentrated at the top. In tax year 2023 the top 1% of earners paid 38.4% of all federal income taxes, the top 10% paid 70.5%, and the top half paid 96.7%, according to IRS Statistics of Income data (see the chart and table below).

The bottom 50% of filers, everyone with adjusted gross income below $53,801, collectively paid just 3.3% of all federal income taxes. Their average effective rate was 3.7%, roughly one-seventh of the 26.3% average rate paid by the top 1%.

The top 1% (AGI above $675,602 in 2023) earned 20.6% of the nation's adjusted gross income but paid 38.4% of the income tax, a share of taxes about 1.9 times their share of income. That ratio is one common way economists measure how progressive a tax is.

Their 26.3% average rate is the highest of any group and roughly double the 14.1% all-filer average. The concentration has grown over decades as the tax code added credits at the bottom and top marginal rates fell from their mid-century highs.

A large minority of households owe no federal income tax in a given year. The Tax Policy Center estimates about 39.6% of households, roughly 72.5 million, paid no federal income tax in 2025, a share expected to ease to 37.4% in 2026 as pandemic-era provisions fully wind down (see the table below).

This is not tax avoidance: it is the standard deduction and refundable credits working as designed. About 70% of nonpayers earn under $75,000, and most still pay payroll taxes, which for many low earners exceed any income tax refund they receive.

The 2017 tax law nearly doubled the standard deduction, which reshaped filing behavior. In 2017 about 31% of returns itemized deductions; by 2022 that had collapsed to roughly 8%, and today close to 90% of filers take the standard deduction (Tax Policy Center).

A bigger standard deduction shields more income from tax at the bottom and simplifies filing for most people. It is also the main reason so many low- and middle-income households fall out of income-tax liability entirely.

The income tax is only part of the picture. When the CBO adds payroll, corporate, and excise taxes, the average total federal tax rate in 2022 ranged from 1.4% for the lowest fifth of households to 23.2% for the top fifth and 31.5% for the top 1% (see the table below).

Looking at the individual income tax alone, the lowest quintile had a rate of about -10.1%, meaning refundable credits paid them more than they owed. The highest quintile paid about 16.6%. Payroll taxes make the overall system less top-heavy than the income tax alone suggests.

The individual income tax is the federal government's single largest revenue source. In fiscal year 2025 it brought in about $2.7 trillion, more than half of the $5.2 trillion the government collected in total (see the table below).

Payroll (social insurance) taxes were second at roughly $1.7 trillion, followed by corporate income taxes at $453 billion. Customs duties jumped about 153% to $195 billion on new tariffs, though they remain a small share of the whole.

Today's 37% top rate is modest next to the 20th century. The top marginal rate started at 7% in 1913, spiked to 77% during World War I, and hit an all-time high of 94% in 1944 (see the chart below). It stayed at 70% or higher from the 1930s until 1981.

The 1980s brought steep cuts: down to 50% in 1982 and just 28% after the 1986 reform. It climbed back to 39.6% in 1993, held there through the 2013 fiscal-cliff deal, and settled at the current 37% starting in 2018.

Since 1985 the IRS has adjusted bracket thresholds, the standard deduction, and dozens of other parameters for inflation each year. That prevents "bracket creep," where raises that only keep pace with prices push people into higher brackets and raise their real tax burden.

For 2026 the adjustment was about 2.3% for most brackets, with an extra bump to roughly 4% for the bottom two brackets under the 2025 tax law. Without indexing, decades of inflation would have pushed nearly everyone into the top brackets.

Long-term capital gains and qualified dividends are taxed on their own schedule, not the ordinary brackets above. For 2026 the rates are 0%, 15%, and 20%: a single filer pays 0% on gains up to $49,450 of taxable income and does not reach the 20% rate until income passes $545,500 (see the table below).

These preferential rates are a major reason wealthy households can have effective rates below their salary-earning neighbors: income from selling long-held investments is taxed more lightly than wages. A 3.8% net investment income tax can apply on top for high earners.

Knowing your marginal bracket, not your effective rate, is what guides most decisions. Your marginal rate is the tax you save on each pre-tax retirement dollar and the tax you owe on the next dollar of income, which is why a 401(k) or traditional IRA contribution is worth more in the 24% bracket than the 12% bracket.

Because long-term gains are taxed at lower rates than wages, holding investments over a year and using tax-advantaged accounts can meaningfully cut what you owe. The brackets are a planning tool: the goal is to manage which dollars land in which band, not to fear crossing a threshold.