2024-2025 federal tax brackets and income rates

The tax brackets you fall into determine how much you owe the IRS at tax time. For tax year 2024 (filing in 2025), there are seven brackets: 10%, 12%, 22%, 24%, 32%, 35% and 37%.

That will remain the same for tax year 2025 (filing in 2026), but the IRS adjusts the income range for each bracket annually to account for inflation's impact on salaries.
 
Depending on how much you make and your filing status, parts of your earnings will likely fall under different brackets.

Here are the income ranges for tax brackets for tax years 2024 and 2025,  as well as how to figure out which brackets apply to you and ways to lower your taxable income.

There are seven tax rates for 2024, ranging from 10% to 37%. The income range in each bracket increased 5.4% from 2023.

In 2024, the maximum 37% rate only applies to individual filers earning over $609,350 and married couples filing jointly who made a combined total of at least $731,200.

Thanks to the Tax Cuts and Jobs Act of 2017 (TCJA), the brackets for tax year 2025 will remain the same as they were in 2024. However, the IRS increased the income thresholds for each tier by 2.8%.

The TCJA is slated to sunset at the end of 2025. Without action from Congress, the brackets will revert to 10%, 15%, 25%, 28%, 33%, 35% and 39.6%.

Because the IRS utilizes progressive rates, few people fall into a single tax bracket. If you're an individual filer who earned $45,000 in taxable income in 2024, for example, the amount you owe will be broken into two tax brackets:

• 10% for the first $11,600
• 12% for any income between $11,601 and $47,150

If you earn $45,000 in 2025, however, the breakdown could look somewhat different.

• 10% for the first $11,925
• 12% for income between $11,926 and $48,475

Your marginal tax rate is the highest bracket you qualify for — or the percentage your last dollar of taxable income is taxed at.

If you earned $70,000 in 2024 and file individually, for example, you have a marginal tax rate of 22%. That's because a portion of your income fell within the $47,151 to $100,525 bracket.

But only $22,849 (or $70,000 - $47,151) is at that rate. Your first $11,000 of taxable income is taxed at the 10% tier, and then the next $35,549 (or $47,150 - $11,601) falls into the 12% bracket.

While your marginal tax rate is the rate you pay on your highest dollar of income, your effective tax rate is the total percentage of income you pay in taxes.

To determine your effective tax rate, you need to divide your total tax by your taxable income. You can find your total tax on line 24 of Form 1040 and your taxable income on line 15.

Your filing status determines your annual tax liability, as well as your filing requirements, standard deduction and eligibility for certain tax credits.

Married filing jointly: You are married and able to file a joint return with your spouse or your spouse died during the tax year and you did not remarry.

Married filing separately: You are married but have chosen to file separate returns.

Head of household: You are an unmarried individual who is not claimed on someone else's return and who pays for over half of the care of at least one dependent.

Surviving spouse: Your spouse died during the previous tax year. To claim this status you must file a joint tax return before their death and have at least one dependent child.

Single: You are unmarried, divorced or legally separated as of the last day of the year and don't have a dependent or other person who qualifies you for any other filing status.

Your marital status on December 31 determines whether you are considered single or married for that year. 

There are several strategies to lower your tax rate that don't involve a pay cut. Some require itemizing, however. The standard deduction in 2024 is $14,600 for a single filer and $29,200 for married couples filing jointly, so your total deductions need to be more than that to make itemizing worth the effort. (In 2025, the standard deduction goes up to $15,000 for single filers and  $30,000 for married couples.)

1. Claim tax credits

Tax credits reduce the amount you owe, providing a dollar-for-dollar decrease in your tax liability. If you owe $2,000 in taxes and qualify for a $500 tax credit, for example, your tax liability is reduced to $1,500.

You can learn about tax credits you may be eligible for on the IRS website, including:

• The Earned Income Tax Credit: If you earned less than $61,555 (or $68,675 if married and filing jointly), you can earn up to $8,046 based on your income and family size
• Child Tax Credit: Worth up to $1,700 per qualifying dependent child depending on your modified adjusted gross income.
• Child and Dependent Care Tax Credit: Claim up to 35% of daycare, dependent care and related expenses, up to $3,000 (or up to $6,000 for two or more children).
• American Opportunity Tax Credit: If you earn$80,000 or less ($160,000 or less if married filing jointly) you can claim $2,500 for qualified tuition costs, school fees, and course materials.
• The Clean Vehicle Tax Credit: Worth up to $7,500 if you purchase an eligible EV.

2. Deduct student loan interest

While tax credits directly reduce your tax bill, tax deductions lower your taxable income by letting you subtract certain expenses.

If you, your spouse or a dependent have federal or private student loans, for example, you can deduct up to $2,500 in student loan interest each year. This write-off begins to phase out if your modified adjusted gross income hits $70,000, however, and disappears entirely at $90,000.

If you're married and filing jointly, the phaseout starts at $155,000 and disappears if you earn $185,000 or more.

3. Max out your retirement accounts

You can also claim deductions for contributions to qualifying pre-tax retirement accounts like an employer-sponsored 401(k) or traditional IRA.

With pre-tax contributions, you're taking less out of your paycheck now. However, because your money is growing tax-deferred, you'll pay income tax on it when you start withdrawing.

4. Contribute to a Health Savings Account

If you have a high-deductible healthcare plan, a Health Savings Account (HSA) allows you to save for upcoming medical expenses. Contributions are tax-free (or tax-deductible if self-funded) and the balance can grow tax-free through investments. Withdrawals are also tax-free if used for eligible expenses — like deductibles or copays, prescriptions, medical devices and even birth control.

Some companies also offer flexible spending accounts (FSA), which lower your taxable income by allowing pre-tax contributions. FSAs don't let you invest, however, and the funds generally don't roll over to the following year.

5. Sell losing stocks

If you own stocks that performed badly this year, you can use your losses to offset the taxes you would pay on other investment gains — a process called tax-loss harvesting.

If you have no capital gains this year, your losses can offset up to $3,000 of ordinary income — anything beyond that can carry over and be used to lower taxes. in the future.

For most taxpayers, federal income taxes for the 2024 tax year are due by April 15, 2025 (or October 2025 with a tax extension).

There are many good free and paid options for filing online, including the IRS's Direct File, which has expanded to 25 states.

TurboTax and H&R Block both topped our list of best tax software, based on cost, features and customer reviews.

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