The US federal income tax is progressive — higher portions of income are taxed at higher rates. But a common misconception: if you're "in" the 24% bracket, that doesn't mean all your income is taxed at 24%. It means only the income above the bracket threshold is taxed at 24%. Everything below is taxed at lower rates. Let's walk through exactly how this works.
2025 Federal Income Tax Brackets (Single Filers)
| Taxable Income | Rate | Tax on This Portion |
|---|---|---|
| $0 – $11,925 | 10% | up to $1,193 |
| $11,926 – $48,475 | 12% | up to $4,386 |
| $48,476 – $103,350 | 22% | up to $12,073 |
| $103,351 – $197,300 | 24% | up to $22,548 |
| $197,301 – $250,525 | 32% | up to $17,031 |
| $250,526 – $626,350 | 35% | up to $131,568 |
| Over $626,350 | 37% | 37¢ on every dollar above |
2025 Standard Deductions
Before applying the brackets, most people subtract the standard deduction from their gross income to get taxable income:
- Single: $15,750
- Married Filing Jointly (MFJ): $31,500
- Head of Household (HOH): $23,625
You can instead itemize deductions (mortgage interest, state/local taxes up to $10,000, charitable contributions, etc.) if they exceed the standard deduction. For most people, the standard deduction wins.
Worked Example — $75,000 Salary (Single)
Gross Income: $75,000
Standard Deduction (Single 2025): −$15,750
Taxable Income: $59,250
Tax Calculation:
10% × $11,925 = $1,193
12% × $36,549 = $4,386 ($11,926 to $48,475)
22% × $10,775 = $2,371 ($48,476 to $59,250)
Total Federal Tax = $7,950
Effective rate: $7,950 / $75,000 = 10.6% — not 22%.
FICA Taxes: Social Security & Medicare
On top of federal income tax, most employees pay FICA taxes. These are completely separate from income tax:
| Tax | Rate | Wage Cap |
|---|---|---|
| Social Security (employee) | 6.2% | $176,100 |
| Medicare (employee) | 1.45% | None |
| Additional Medicare (high earners) | 0.9% | Above $200K (single) |
Employers match 6.2% SS + 1.45% Medicare. Self-employed pay the full 15.3% (both halves) as Self-Employment Tax, but can deduct half.
Worked Example — $150,000 Salary (Single)
Taxable Income: $150,000 − $15,750 = $134,250
Federal Income Tax:
10% × $11,925 = $1,193
12% × $36,549 = $4,386
22% × $54,875 = $12,073
24% × $30,900 = $7,416
Total Federal Tax = $25,068
FICA:
SS: 6.2% × $150,000 = $9,300
Medicare: 1.45% × $150,000 = $2,175
Total (Fed + FICA) = $36,543
Effective federal income tax rate: 16.7%. All-in rate including FICA: 24.4%.
State Income Tax
Federal tax is just part of your burden. Most states levy their own income tax on top:
- No state income tax: Alaska, Florida, Nevada, New Hampshire (wages only), South Dakota, Tennessee (wages only), Texas, Washington, Wyoming
- Flat rate: Colorado (4.4%), Illinois (4.95%), Massachusetts (5%), North Carolina (4.5%)
- Progressive: California (up to 13.3%), New York (up to 10.9%), Hawaii (up to 11%)
Filing Status Matters
Your filing status determines your bracket thresholds, standard deduction, and eligibility for certain credits. Married Filing Jointly (MFJ) generally has wider brackets — a couple making $200,000 combined pays less than two single filers each making $100,000, because the MFJ brackets are exactly double the single brackets.
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Source: IRS Rev. Proc. 2024-40, IRS Publication 15. Tax Year 2025. Not tax advice. Consult a CPA for individual circumstances.