The US uses a progressive federal income tax system — meaning different portions of your income are taxed at different rates. Most people think they're "in the 22% bracket" and pay 22% on everything. That's not how it works. You pay 10% on the first chunk, 12% on the next chunk, 22% on the chunk above that — and so on. Only the income within each bracket is taxed at that bracket's rate.
This guide lays out all 2025 tax brackets by filing status, the standard deductions, FICA payroll taxes, capital gains rates, and worked examples so you know exactly what you'll owe.
2025 Federal Income Tax Brackets
Single Filers — 2025
| Taxable Income | Tax Rate | Tax on This Bracket |
|---|---|---|
| $0 – $11,925 | 10% | Up to $1,192.50 |
| $11,926 – $48,475 | 12% | Up to $4,385.88 |
| $48,476 – $103,350 | 22% | Up to $12,072.38 |
| $103,351 – $197,300 | 24% | Up to $22,545.96 |
| $197,301 – $250,525 | 32% | Up to $17,031.36 |
| $250,526 – $626,350 | 35% | Up to $131,529.10 |
| Over $626,350 | 37% | — |
Married Filing Jointly (MFJ) — 2025
| Taxable Income | Tax Rate |
|---|---|
| $0 – $23,850 | 10% |
| $23,851 – $96,950 | 12% |
| $96,951 – $206,700 | 22% |
| $206,701 – $394,600 | 24% |
| $394,601 – $501,050 | 32% |
| $501,051 – $751,600 | 35% |
| Over $751,600 | 37% |
Head of Household — 2025
| Taxable Income | Tax Rate |
|---|---|
| $0 – $17,000 | 10% |
| $17,001 – $64,850 | 12% |
| $64,851 – $103,350 | 22% |
| $103,351 – $197,300 | 24% |
| $197,301 – $250,500 | 32% |
| $250,501 – $626,350 | 35% |
| Over $626,350 | 37% |
Standard Deduction 2025
Before applying the tax brackets, you subtract the standard deduction (or your itemized deductions, whichever is higher) from your gross income to arrive at taxable income.
Standard Deduction Amounts — 2025
| Filing Status | Standard Deduction |
|---|---|
| Single | $15,000 |
| Married Filing Jointly | $30,000 |
| Married Filing Separately | $15,000 |
| Head of Household | $22,500 |
| Additional (Age 65+ or blind) | +$2,000 (single) / +$1,600 (MFJ per qualifying person) |
The standard deduction is adjusted annually for inflation. About 90% of filers take the standard deduction; itemizing is worthwhile mainly if you have large mortgage interest, state/local taxes (SALT, capped at $10,000), or charitable contributions.
Marginal Rate vs Effective Rate — The Key Distinction
Your marginal rate is the rate on your last dollar. Your effective rate is total tax ÷ total income. They're very different numbers, and knowing both matters for financial planning.
Single Filer, $80,000 Gross Income
Taxable income = $80,000 − $15,000 (standard deduction) = $65,000
Tax calculation:
- 10% on $11,925 = $1,192.50
- 12% on ($48,475 − $11,925) = 12% × $36,550 = $4,386.00
- 22% on ($65,000 − $48,475) = 22% × $16,525 = $3,635.50
Total federal income tax: $9,214
Marginal rate: 22% | Effective rate: $9,214 / $80,000 = 11.5%
Every extra dollar earned above $65,000 (taxable) is taxed at 22% until $103,350 (taxable) / ~$118,350 (gross).
Married Filing Jointly, $150,000 Combined Income
Taxable income = $150,000 − $30,000 = $120,000
- 10% on $23,850 = $2,385
- 12% on ($96,950 − $23,850) = 12% × $73,100 = $8,772
- 22% on ($120,000 − $96,950) = 22% × $23,050 = $5,071
Total federal income tax: $16,228
Effective rate: $16,228 / $150,000 = 10.8%
FICA Payroll Taxes — Social Security & Medicare
On top of federal income tax, employees pay FICA taxes. These are separate from income tax and withheld from every paycheck.
FICA Rates 2025
| Tax | Employee Rate | Employer Rate | Wage Base |
|---|---|---|---|
| Social Security | 6.2% | 6.2% | Up to $176,100 |
| Medicare | 1.45% | 1.45% | All wages |
| Additional Medicare | 0.9% | 0% | Above $200K (single) / $250K (MFJ) |
Self-employed individuals pay both the employee and employer portions — effectively 15.3% on the first $176,100 and 2.9% above that. However, they can deduct half of self-employment tax from gross income.
Long-Term Capital Gains Tax Rates 2025
Assets held longer than one year qualify for preferential long-term capital gains (LTCG) rates — significantly lower than ordinary income rates.
Long-Term Capital Gains Rates — 2025
| Rate | Single (Taxable Income) | MFJ (Taxable Income) |
|---|---|---|
| 0% | Up to $48,350 | Up to $96,700 |
| 15% | $48,351 – $533,400 | $96,701 – $600,050 |
| 20% | Above $533,400 | Above $600,050 |
Capital gains stack on top of ordinary income for bracket purposes. So if you have $40,000 of wages and $20,000 of LTCG, the gains are taxed at 0% if your total is below $48,350 (single).
An additional 3.8% Net Investment Income Tax (NIIT) applies to investment income (including capital gains) for high earners above $200K (single) / $250K (MFJ).
Alternative Minimum Tax (AMT) 2025
The AMT is a parallel tax system designed to ensure high earners can't eliminate their tax bill through deductions. You compute your income under regular rules AND under AMT rules, then pay whichever is higher.
AMT Key Numbers — 2025
| Single | Married Filing Jointly | |
|---|---|---|
| AMT Exemption | $88,100 | $137,000 |
| Exemption Phase-out begins | $626,350 | $1,252,700 |
| AMT Rate on AMTI up to $220,700 | 26% | |
| AMT Rate above $220,700 | 28% | |
AMT primarily affects people with large ISO stock option exercises, high state and local taxes before TCJA, or significant miscellaneous deductions.
Common Tax Credits (Reduce Tax Dollar-for-Dollar)
Unlike deductions (which reduce taxable income), credits reduce your actual tax bill dollar-for-dollar. Key 2025 credits:
- Child Tax Credit: $2,000 per qualifying child under 17. Phases out above $200K (single) / $400K (MFJ). Up to $1,700 is refundable (ACTC).
- Child and Dependent Care Credit: 20-35% of up to $3,000 (one dependent) or $6,000 (two+) in qualifying care expenses.
- Earned Income Tax Credit (EITC): For lower-to-moderate income workers. Maximum $8,046 with 3+ children (2025).
- American Opportunity Credit: Up to $2,500/year for first 4 years of higher education. 25% refundable.
- Lifetime Learning Credit: 20% of up to $10,000 in education expenses = up to $2,000/year.
- Retirement Savings Contribution Credit (Saver's Credit): 10-50% of up to $2,000 in IRA/401(k) contributions for lower-income earners.
Key 2025 Retirement Contribution Limits
Retirement Account Limits — 2025
| Account | 2025 Limit | Catch-up (Age 50+) |
|---|---|---|
| 401(k) / 403(b) / 457 | $23,500 | +$7,500 (age 50+) / +$11,250 (age 60-63) |
| Traditional or Roth IRA | $7,000 | +$1,000 |
| SEP-IRA | $70,000 or 25% of compensation | — |
| SIMPLE IRA | $16,500 | +$3,500 |
| HSA (individual) | $4,300 | +$1,000 |
| HSA (family) | $8,550 | +$1,000 |
Frequently Asked Questions
What are the 2025 tax brackets for single filers?
10% up to $11,925; 12% on $11,926–$48,475; 22% on $48,476–$103,350; 24% on $103,351–$197,300; 32% on $197,301–$250,525; 35% on $250,526–$626,350; 37% above $626,350.
What is the 2025 standard deduction?
$15,000 for single filers, $30,000 for married filing jointly, and $22,500 for head of household.
What is the difference between marginal and effective tax rate?
Marginal rate is the rate on your last dollar of income. Effective rate is total tax ÷ total income. A $80,000 single filer is in the 22% bracket but has an effective rate of about 11.5%.
Do you pay Social Security on all wages?
No. Social Security tax (6.2%) only applies to wages up to $176,100 in 2025. Medicare (1.45%) applies to all wages.
What is the capital gains tax rate for 2025?
Long-term capital gains: 0% (income up to $48,350 single/$96,700 MFJ), 15% (up to $533,400/$600,050), or 20% above those. Short-term gains taxed as ordinary income.
What is the 2025 AMT exemption?
$88,100 for single filers and $137,000 for married filing jointly, phasing out above $626,350/$1,252,700.
Sources: IRS Revenue Procedure 2024-40 (2025 inflation adjustments); IRS Publication 505 (Tax Withholding and Estimated Tax); Social Security Administration Wage Base 2025. Educational purposes only — consult a tax professional for personalised guidance.
Official Sources