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Income Taxes

The facts you need.

Our two cents

Two Cents icon

Our two cents

Tax laws are constantly being amended. It's smart to stay on top of changes to make sure you're not only paying what you owe, but also taking advantage of all the legitimate ways to reduce your taxes. For the latest tax information, go to IRS.gov.

Not many people, except perhaps certified public accountants and IRS employees, like taxes. But we all have to pay them sooner or later, whether it's through income taxes, payroll taxes or sales taxes. The positive side of taxes is that they support everything from schools and roads to social services and law enforcement.

The more you know about taxes, the less burdensome they may seem. Here are some basic facts to help you better understand our income tax system.

Income tax brackets

The United States income tax system is progressive—meaning, the higher your income, the higher your tax rate. The rates are also different depending on whether you're a single filer or married filing jointly.

Here are the basic income tax brackets. For more details on tax brackets, see the IRS Federal income tax rates and brackets.

2024 Federal Income Tax Brackets

2023 Federal Income Tax Brackets and Rates for Single Filers, Married Couples Filing Jointly, and Heads of Households
  • Rate
  • For Unmarried Individuals
  • For Married Individuals Filing Joint Returns
  • For Heads of Households
  • Rate
    10%
  • For Unmarried Individuals
    $0-$10,275
  • For Married Individuals Filing Joint Returns
    $0-$20,550 
  • For Heads of Households
    $0-$14,650
  • Rate
    12%
  • For Unmarried Individuals
    $10,276-$41,775
  • For Married Individuals Filing Joint Returns
    $20,551-$83,350
  • For Heads of Households
    $14,651-$55,900
  • Rate
    22%
  • For Unmarried Individuals
    $41,776-$89,075
  • For Married Individuals Filing Joint Returns
    $84,551-$178,150
  • For Heads of Households
    $55,901-$89,050
  • Rate
    24%
  • For Unmarried Individuals
    $89,076-$170,050
  • For Married Individuals Filing Joint Returns
    $178,151-$340,100
  • For Heads of Households
    $89,051-$170,050
  • Rate
    32%
  • For Unmarried Individuals
    $171,051-$215,590
  • For Married Individuals Filing Joint Returns
    $340,101-$431,900
  • For Heads of Households
    $170,051-$215,950
  • Rate
    35%
  • For Unmarried Individuals
    $215,591-$539,900
  • For Married Individuals Filing Joint Returns
    $431,901-$647,850
  • For Heads of Households
    $215,951-$539,900
  • Rate
    37%
  • For Unmarried Individuals
    $539,901-And up
  • For Married Individuals Filing Joint Returns
    $647,851-And up
  • For Heads of Households
    $539,901-And up

Source: Internal Revenue Service
 

Ways to reduce your tax bill

Your taxable income is usually lower than your actual income. That's because there are certain ways to lower your tax bill through deductions, exemptions and credits, including:

  • Making a contribution to your retirement account
     
  • Making a charitable contribution
     
  • Getting a credit for dependent care
     
  • Qualifying for the earned income tax credit

Learn about various deductions and credits and how to calculate your tax due. Please note that the ability to claim any given tax deduction or tax credit varies depending on a range of factors including your age, income and filing status. Need help? Talk with a tax advisor who can help you with specific advice for your situation. 

Who needs to file a federal income tax return?

Not everyone is required to file a tax return. But even if your income falls below the filing requirement, you could benefit from filing a return. Every year, many low-income people forfeit tax refunds simply because they didn't file a return. To quickly find out if your income is below the filing requirement, go to the IRS withholding calculator

Lower your tax bill with a little help from your 401(k).

Tip Icon

Lower your tax bill with a little help from your 401(k).

Reduce your tax bill by putting aside money in your 401(k). And if your employer offers a matching contribution, contribute at least enough to get the full match. Otherwise, you're basically turning down free money.

Keep learning

Keep Learning icon

Keep learning

Don't just invest—invest the smart way. Utilize tax-advantaged accounts, like an IRA, and discover other methods for making your money go further.

  • How to be tax-smart when investing.
     
  • IRAs.

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This information on this website is for educational purposes only, and is not intended to be a substitute for specific individualized tax, legal, or investment planning advice. Where specific advice is necessary or appropriate, you should consult with a qualified tax advisor, CPA, Financial Planner, or Investment Manager.

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