US Tax Statistics (2026)

In fiscal year 2025, the federal government took in about $5.23 trillion in net receipts, up 6.4% (roughly $317 billion) from the year before. The IRS side of the ledger was larger: it collected close to $5.3 trillion in gross taxes before sending back refunds, a figure the agency says funds about 96% of the government's operations.

The gap between the two numbers is refunds. The IRS issued about $638.8 billion in refunds in FY2025, including $516.4 billion to 116.9 million individual filers. Even at $5.2 trillion, receipts fell well short of $7 trillion in outlays, leaving a deficit near $1.8 trillion.

Federal revenue leans heavily on households. Individual income taxes brought in $2,656 billion in FY2025, about 51% of all receipts, and payroll (social insurance) taxes added another $1,748 billion, or 33% (see the chart and table below). Together, taxes on wages and salaries supply roughly five of every six federal dollars.

Corporate income taxes contributed $452 billion (about 9%), excise taxes $106 billion (2%), and a catch-all 'other' category $272 billion (5%), which includes customs duties, estate and gift taxes, and Federal Reserve remittances. The composition has shifted sharply over decades, a theme the next sections trace.

The individual income tax is the workhorse of federal finance. Its $2,656 billion haul in FY2025 was up 9.5% year over year, driven by higher withholding and quarterly payments as wages and asset values grew. That single tax is larger than payroll and corporate taxes combined.

Its dominance is durable: individual income taxes have supplied close to half of all federal revenue since 1950. Because the tax is progressive and applies to capital gains, its receipts swing with the economy and markets, making it both the biggest and the most volatile revenue line.

Payroll taxes are the quiet giant. At $1,748 billion in FY2025, these social-insurance levies (Social Security, Medicare, and unemployment) were the second-largest source and rose 2.3% on the year. They are flat-rate and capped, so they weigh more heavily on middle-income earners than the graduated income tax does.

Their share has climbed for generations, from under 15% of federal revenue in the 1950s to roughly a third today, as Social Security and Medicare expanded. For many working households, payroll tax is the largest federal tax they pay, exceeding their income tax.

The corporate income tax is a shrinking slice. It generated $452 billion in FY2025, down 14.7% from the prior year and just 8.6% of total receipts. That is a long way from 1960, when corporate taxes were about 23% of federal revenue (Tax Policy Center).

The decline reflects lower statutory rates (the 2017 law cut the corporate rate to 21%), the rise of pass-through businesses whose profits are taxed on individual returns, and expanded deductions. Corporate receipts are also cyclical, so a single strong or weak profit year can move the line billions of dollars.

The 2025 story was tariffs. Customs duties roughly doubled, jumping about 153% to near $195 billion from $77 billion a year earlier, after the administration imposed broad new tariffs. That helped push the 'other' revenue category up 79% and offset a chunk of the drop in corporate receipts.

In historical terms customs duties are still small (a few percent of revenue), but the 2025 jump was the fastest growth of any major source. It is also legally contested, so whether tariff revenue stays elevated is an open question the CBO has flagged in its updated projections.

Revenue only tells half the story. At 17.3% of GDP in FY2025, federal receipts were up from 17.0% in 2024 and exactly matched the 50-year average of 17.3%. Outlays, however, ran at 23.1% of GDP, well above the 21.2% long-run norm, leaving a deficit of about $1.8 trillion.

Interest is the pressure point. Net interest on the debt topped $1 trillion for the first time in FY2025 and is now among the largest single federal expenses, roughly on par with defense. With federal debt above $38 trillion, rising interest costs compete directly with what taxes can fund.

The federal income tax is highly concentrated. In Tax Year 2023, the top 1% of filers (those with AGI above $675,602) paid 38.4% of all federal individual income taxes while earning 20.6% of the income (see the chart and table below). The top 10% paid more than 70%, and the top half paid 96.7% of the total.

The bottom 50% of filers, everyone earning under about $53,801, paid just 3.3% of the income tax. That concentration has grown over time as brackets, credits, and a larger standard deduction pulled more lower-income households off the income-tax rolls entirely.

Progressivity shows up clearly in effective rates. In Tax Year 2023 the top 1% paid an average income tax rate of 26.3%, about seven times the 3.7% average rate for the bottom half, with all filers averaging 14.1% (see the chart below). Rates step down smoothly through the income distribution.

These are income-tax rates only. Add payroll taxes and the picture flattens somewhat for middle earners, since payroll tax is capped, but the CBO's broader measure still finds the overall federal system clearly progressive, with average total federal tax rates rising with income across every quintile.

For many lower-income households, the federal income tax is a net transfer, not a bill. The CBO found that in 2021 households in the lowest income quintile paid no federal income tax on average and received about $5,200 apiece in refundable credits such as the expanded child tax credit (CBO).

That is why the bottom 50% pay so little of the income tax even though they file tens of millions of returns. Refundable credits (the EITC and Child Tax Credit) can push a household's income-tax liability below zero, delivering a payment rather than collecting one.

The 2026 code keeps seven brackets: 10%, 12%, 22%, 24%, 32%, 35%, and 37%, with the top rate starting at $640,600 for singles and $768,700 for joint filers (see the table below). Thresholds rose about 2.7% on average for inflation, now indexed to the chained CPI.

The standard deduction climbed to $16,100 for singles and $32,200 for married couples, shielding the first slice of income from tax entirely. Because rates are marginal, understanding your top bracket is the starting point for tax-efficient investing: it drives the value of tax-deferred accounts, Roth conversions, and long-term capital-gains treatment.

Behind the totals is a vast processing operation. In FY2025 the IRS handled 271.4 million returns and forms, 82.6% of them filed electronically, and issued $638.8 billion in refunds (see the table below). Individual e-filing reached 93.7%, leaving paper as the exception.

Audits are rare and getting rarer. The IRS closed 505,514 audits in FY2024 (recommending about $29 billion in additional tax), and fewer than 1 in 500 individual returns are examined, though rates run far higher for very high incomes and business filers. Enforcement still recovered $77.6 billion in unpaid taxes.

Not every dollar owed gets paid. The IRS projects a gross tax gap of $696 billion for Tax Year 2022, the difference between taxes legally owed and paid on time. Underreporting income accounts for the bulk ($539 billion), with underpayment ($94 billion) and nonfiling ($63 billion) making up the rest (see the table below).

Late payments and enforcement recover about $90 billion, leaving a net gap near $606 billion. The voluntary compliance rate has held steady around 85% for years, so the dollar gap grows mainly because the economy does. That uncollected sum is roughly a third of the annual deficit.

By global standards, Americans are lightly taxed. Counting federal, state, and local taxes together, the US tax-to-GDP ratio was 25.6% in 2024, well below the 34.1% OECD average and 31st of 38 member countries (see the table below). Denmark led at 45.2%, France and Austria followed near 43%.

The US relies more on income and payroll taxes and, unlike most peers, has no national value-added tax, which is a big reason its overall ratio sits lower. For investors, the practical takeaway is that after-tax returns hinge on account structure and holding periods: sheltering growth in tax-advantaged accounts is often the highest-return move you fully control.