What is a tax bracket?

Your tax bracket is the rate that is applied to your top slice of income. Learn more about tax brackets and use the tax rate calculator to find yours . What is taxable income? Taxable income typically includes wages, salaries, bonuses, commissions, and tips, but can be complex as the IRS classifies other types of earnings as taxable income as well.

What is your federal income tax bracket?

Your income each year determines which federal tax bracket you fall into and which of the seven income tax rates applies. Knowing your federal tax bracket is essential, as it determines your federal income tax rate for the year. There are seven different income tax rates: 10%, 12%, 22%, 24%, 32%, 35%, and 37%.

Does a higher tax bracket mean higher tax rates?

In the U.S., we have a progressive tax system, so different parts of your income are taxed at different rates. Only the income in the higher bracket is taxed at that rate. The rest is taxed at the lower rates. So, a higher tax bracket doesn't mean a higher rate on all your income. See the current federal income tax brackets .