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Whether it is the start of a new tax year or the end of one, it is always a good time to acquaint yourself with the latest federal tax brackets. These vary from year to year because the Internal Revenue Service (IRS) adjusts them annually to account for changes in the cost of living. Because these changes may impact your tax payment strategy, it is important to stay updated on the latest tax rates. Before you file your taxes, this is what you need to know about the marginal tax rates for the tax year 2026.
A financial advisor who offers tax services can help you with tax planning to best protect your assets.
What Is a Marginal Tax Rate?
A marginal tax rate is the amount of additional tax you incur for added levels of income. The United States imposes a progressive tax system, so the more you earn, the higher the tax bracket for your income. The exact range then determines the tax rate you effectively pay, although normally, those earning more income face a greater tax burden. This means that you keep a smaller amount of money per dollar earned.
Your marginal tax rate solely applies to your taxable income. It is calculated by subtracting your standard or itemized deductions from your annual gross income.
However, it is not taxed at a flat rate. For example, suppose you earn $110,000 in taxable income during 2026. While an annual taxable income of $110,000 puts single filers in the 24% tax bracket, that does not mean you would get hit with a 24% tax bill. Marginal tax rates only apply to the portion of income that falls directly within that bracket.
To illustrate, let’s say you earn $13,000 in taxable income in 2026, which puts you in the 12% marginal tax bracket. As a result, you would pay 10% on the first $12,400 in taxable income. You would then pay 12% on the remaining $600 of income.
SmartAsset’s federal income tax calculator can help you estimate your taxes for an investment.
Income Tax Calculator
Calculate your federal, state and local taxes for the 2025 tax year.
Your 2025 Total Income Taxes
Federal Income & FICA Taxes
State Taxes
Local Taxes
About This Calculator
Our income tax calculator calculates your federal, state and local taxes based on several key inputs: your household income, location, filing status and number of personal exemptions.
How Income Taxes Are Calculated
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First, we calculate your adjusted gross income (AGI) by taking your total household income and reducing it by certain items such as contributions to your 401(k).
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Next, from AGI we subtract exemptions and deductions (either itemized or standard) to get your taxable income. Exemptions can be claimed for each taxpayer.
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Based on your filing status, your taxable income is then applied to the tax brackets to calculate your federal income taxes owed for the year.
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Your location will determine whether you owe local and / or state taxes.
When Do We Update? - We check for any updates to the latest tax rates and regulations annually.
Customer Service - If you would like to leave any feedback, feel free to email info@smartasset.com.
Assumptions
Deductions
- "Other Pre-Tax Deductions" are not used to calculate state taxable income.
Credits
- The only federal credit automatically calculated is the Savers Credit, depending on your eligibility.
- We do not apply any refundable credits, like the Child Tax Credit or Earned Income Tax Credit (EITC).
- We do not apply state credits in our calculations.
Itemized Deductions
- If itemizing at the federal level, you may need to itemize at the state level too. Some states don't allow itemized deductions, which is accounted for in our calculations.
- When calculating the SALT deduction for itemized deductions, we use state and local taxes, and we assume your MAGI.
- We assume that there is no cap to itemized deductions, if a state allows them.
- We do not categorize itemized deductions (such as medical expenses or mortgage interest), which could be subject to specific caps per state.
Local Tax
- Depending on the state, we calculate local taxes at the city level or county level. We do not include local taxes on school districts, metro areas or combine county and city taxes.
- With the exception of NYC, Yonkers, and Portland/Multnomah County, we assume local taxes are a flat tax on either state taxable income or gross income.
Actual results may vary based on individual circumstances and changes in tax laws or IRS regulations. Estimates provided by this calculator do not guarantee income tax amounts or rates. Past performance is not indicative of future results.
SmartAsset.com does not provide legal, tax, accounting or financial advice (except for referring users to third-party advisers registered or chartered as fiduciaries ("Adviser(s)") with a regulatory body in the United States). Articles, opinions and tools are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual. Users should consult their accountant, tax advisor or legal professional to address their particular situation.
Marginal Tax Rate vs. Effective Tax Rate
Both marginal and effective tax rates help taxpayers find out how much they owe the IRS, although effective tax rates differ slightly.
Effective tax rates are based on your annual income and your total income tax liability. To find yours, simply take the latter and divide it by your gross annual income. The result is the percentage of annual income you should pay in taxes.
In contrast, marginal rates are progressive and include seven tax brackets. Generally, the more you earn, the more likely you are to use marginal rates as your measurement tool. If you find your income falls into one of the lower brackets, you can probably use the effective rate more reliably.
2026 Marginal Tax Rates
Marginal tax rates include seven brackets 10%, 12%, 22%, 24%, 32%, 35% and 37%. Where you fall will depend on your filing status (single, married couple filing jointly, head of household) and the amount of income you earn yearly.
Here are the marginal tax rates for 2026, which you will pay in 2027:
| Rate | Single | Married, Filing Jointly | Married, Filing Separately | Head of Household |
|---|---|---|---|---|
| 10% | $0 – $12,400 | $0 – $24,800 | $0 – $12,400 | $0 – $17,700 |
| 12% | $12,400 – $50,400 | $24,800 – $100,800 | $12,400 – $50,400 | $17,700 – $67,450 |
| 22% | $50,400 – $105,700 | $100,800 – $211,400 | $50,400 – $105,700 | $67,450 – $105,700 |
| 24% | $105,700 – $201,775 | $211,400 – $403,550 | $105,700 – $201,775 | $105,700 – $201,750 |
| 32% | $201,775 – $256,225 | $403,550 – $512,450 | $201,775 – $256,225 | $201,750 – $256,200 |
| 35% | $256,225 – $640,600 | $512,450 – $768,700 | $256,225 – $384,350 | $256,200 – $640,600 |
| 37% | $609,351+ | $768,700+ | $384,350+ | $640,600+ |
For a comparison, here are the marginal tax rates for 2025, which are paid in 2026:
| Rate | Single | Married, Filing Jointly | Married, Filing Separately | Head of Household |
|---|---|---|---|---|
| 10% | $0 – $11,925 | $0 – $23,850 | $0 – $11,925 | $0 – $17,000 |
| 12% | $11,925 – $48,475 | $23,850 – $96,950 | $11,925 – $48,475 | $17,000 – $64,850 |
| 22% | $48,475 – $103,350 | $96,950 – $206,700 | $48,475 – $103,350 | $64,850 – $103,350 |
| 24% | $103,350 – $197,300 | $206,700 – $394,600 | $103,350 – $197,300 | $103,350 – $197,300 |
| 32% | $197,300 – $250,525 | $394,600 – $501,050 | $197,300 – $250,525 | $197,300 – $250,500 |
| 35% | $250,525 – $626,350 | $501,050 – $751,600 | $250,525 – $375,800 | $250,500 – $626,350 |
| 37% | $626,350+ | $751,600+ | $375,800+ | $626,350+ |
Remember, marginal tax rates do not use a fixed percentage across your total income. Instead, you portion out your income as it falls within each tax bracket and then you pay the corresponding rate on that specific range of income. That way, your first dollars receive the lowest rate, and the last portion receive the highest.
Ways to Cut Your Tax Bill
There are a few ways you can reduce your taxable income. The right method may depend on your financial and personal situation, though. Some suggestions worth consideration are:
Set up a College Savings Fund
For example, some can reduce their tax bill by creating a college savings fund. When you contribute to a 529 plan, you can possibly benefit from state-level tax deductions. Furthermore, distributions and earnings made through the account grow tax-free when you use them for qualified expenses.
Save for Retirement
Retirement accounts provide similar opportunities. When you fund accounts like 401(k)s and IRAs, you do so with pre-tax dollars. Therefore, contributing to them lowers your taxable income for the year. Health savings accounts (HSA) allow you to take advantage of the same benefit but for medical expenses, as well.
Make a Charitable Contribution
For tax years 2025, the IRS has allowed taxpayers to make charitable contributions to reduce their tax bills. Donating assets or cash to a qualified nonprofit organization allows you to lower your taxable income amount. This requires you to itemize your tax deductions, though.
Harvest Investment Losses
Tax-loss harvesting is a strategy investors often use to limit their short-term capital gains, thereby offsetting their tax liability. Essentially, you sell off investments that have an unrealized loss and report those losses. That can help reduce your tax bill significantly, as short-term capital gains may receive higher tax rates than long-term capital gains.
Short-term gains tend to equal your regular tax bracket rate, whereas a long-term gain tax rate is either 0%, 15% or 20%.
Use Tax Credits
There are various tax credits available that offer a dollar-for-dollar reduction on the taxes you owe, not just your taxable income. They may apply on a federal or state level, depending on their type.
Since they can vary, they are able to help a wide range of citizens. For example, families who adopt children can use the federal adoption credit to offset the costs of adoption.
Contribute to an HSA
Contributing to a health savings account (HSA) offers several tax advantages, including lowering your taxable income for the year in which contributions are made.
For 2026, the HSA contribution limits are $4,400 for individuals and $8,750 for families. As an example, an individual could deduct up to $4,400 from their income, lowering their eventual tax liability. Individuals aged 55 or older can also make an additional catch-up contribution of $1,000, further bolstering the tax benefit of using an HSA.
Bottom Line
While it would be nice if the rules of taxation stayed the same year to year, they often do not. They are subject to change due to factors like current events and inflation. Therefore, it is vital to review the requirements before tax season rolls around. Knowing and planning for your rate of taxation can help you plan your finances more effectively.
Tips for Filing Your Taxes
- A well-planned tax strategy can help you save funds every year. That’s where a financial advisor comes in. They can help you find the right tax plan for your situation. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- Understanding your finances is key to an airtight tax strategy. Using our tax calculators, like the federal income tax calculator and property tax calculator, you can plan ahead and achieve your goals.
- It’s also recommended to check out the best tax filing software available. With technology on your side, you can smooth out the entire process.
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