Marginal tax rate

How it works

Federal income tax is charged in layers. Each slice of taxable income is taxed at the rate of the bracket it falls in, and your marginal rate is the rate on the top slice. For 2026, the 22% bracket for single filers covers taxable income from $50,400 to $105,700, so a single filer whose taxable income ends in that range has a 22% marginal rate, even though the first dollars were taxed at 10% and 12%.

The marginal rate is the one to use when something changes at the edge: a raise, a side job or a new deduction. A deduction that stays inside the 22% bracket saves about 22 cents of federal income tax per dollar deducted; inside the 12% bracket, it saves about 12 cents. Moving into a higher bracket changes the rate only on the dollars above the line.

The bracket rate does not capture every tax on an extra dollar. Social Security and Medicare taxes on wages, and any state or local income tax, are figured under separate rules. Bracket thresholds also vary by filing status and are adjusted for inflation each year, so it helps to confirm that a table matches both your filing status and the tax year before relying on it.

Related terms

Sources and further reading

• IRS: Federal income tax rates and brackets
• IRS: Tax inflation adjustments for tax year 2026

Examples are illustrative and focus on U.S. personal finance. This page is educational, not individual financial, investment, tax, or legal advice. Read our editorial approach or report a correction.