US Federal Income Tax — How It Works (2025)
The United States uses a progressive federal income tax system managed by the Internal Revenue Service (IRS). Tax is calculated in brackets — each portion of your income is taxed at the rate for the bracket it falls into, not your entire income at the top rate.
2025 Federal Tax Brackets — Single Filer
| Taxable Income | Rate | Tax on Bracket |
|---|---|---|
| $0 – $11,925 | 10% | Up to $1,192 |
| $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 $17,032 |
| $250,526 – $626,350 | 35% | Up to $131,538 |
| Above $626,350 | 37% | 37% of excess |
2025 Federal Tax Brackets — Married Filing Jointly
| Taxable Income | 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% |
| Above $751,600 | 37% |
Standard Deduction vs Itemizing
Most US taxpayers take the standard deduction, which reduces taxable income without needing to track individual expenses. For 2025, the standard deduction is $15,000 (single) or $30,000 (married joint). Itemizing makes sense only if your deductible expenses (mortgage interest, state taxes, charitable donations) exceed the standard deduction.
What's Not Included
- State income tax: 41 states plus DC levy income tax (0–13.3%)
- FICA: 7.65% combined Social Security + Medicare on wages
- Capital gains: Long-term gains taxed at preferential rates (0%, 15%, 20%)
- Alternative Minimum Tax (AMT): May apply to high-income filers
Key Filing Dates — Tax Year 2025
- Tax year: January 1 – December 31, 2025
- Filing deadline: April 15, 2026 (typically)
- Extension deadline: October 15, 2026 with Form 4868