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Understanding Tax Brackets (2024)

A comprehensive guide to federal and state income tax brackets for 2024 and how they affect your take-home pay.

How Tax Brackets Work

The U.S. uses a progressive tax system, which means you pay higher tax rates on higher portions of your income. Many people mistakenly believe that if they move into a higher tax bracket, all of their income will be taxed at that rate.

In reality, only the income above each threshold is taxed at the higher rate. This is known as a marginal tax rate system.

Example:

If you're single with $60,000 in taxable income in 2024:

  • The first $11,600 is taxed at 10% = $1,160
  • Income from $11,601 to $47,150 is taxed at 12% = $4,266
  • Income from $47,151 to $60,000 is taxed at 22% = $2,827
  • Total federal income tax: $8,253 (effective tax rate of 13.8%)

This is why your effective tax rate (the actual percentage of your income that goes to taxes) is typically lower than your highest tax bracket.

Federal Income Tax Brackets (2024)

Single Filers

Tax Rate Taxable Income Range
10.0% 10% on income between $0 and $11,600
12.0% 12% on income between $11,601 and $47,150
22.0% 22% on income between $47,151 and $100,525
24.0% 24% on income between $100,526 and $191,950
32.0% 32% on income between $191,951 and $243,725
35.0% 35% on income between $243,726 and $609,350
37.0% 37% on income over $609,350

Married Filing Jointly

Tax Rate Taxable Income Range
10.0% 10% on income between $0 and $23,200
12.0% 12% on income between $23,201 and $94,300
22.0% 22% on income between $94,301 and $201,050
24.0% 24% on income between $201,051 and $383,900
32.0% 32% on income between $383,901 and $487,450
35.0% 35% on income between $487,451 and $731,200
37.0% 37% on income over $731,200

Head of Household

Tax Rate Taxable Income Range
10.0% 10% on income between $0 and $16,550
12.0% 12% on income between $16,551 and $63,100
22.0% 22% on income between $63,101 and $100,500
24.0% 24% on income between $100,501 and $191,950
32.0% 32% on income between $191,951 and $243,700
35.0% 35% on income between $243,701 and $609,350
37.0% 37% on income over $609,350

Standard Deductions (2024)

Filing Status Standard Deduction
Single $14,600
Married Filing Jointly $29,200
Head of Household $21,900

Note: Standard deductions are subtracted from your gross income to determine your taxable income.

FICA Taxes (2024)

In addition to income taxes, your earnings are also subject to FICA (Federal Insurance Contributions Act) taxes, which fund Social Security and Medicare programs.

Social Security Tax

Rate: 6.2%

Wage Base Limit: $168,600

Income above the wage base limit is not subject to Social Security tax.

Medicare Tax

Base Rate: 1.45% (no income limit)

Additional Medicare Tax: 0.9% on earnings above $200,000

State Income Tax Rates

State income tax rates vary widely across the United States. Some states have a progressive tax structure similar to federal taxes, while others have a flat tax rate or no income tax at all.

States with No Income Tax

  • Alaska (AK)
  • Florida (FL)
  • Texas (TX)
  • Washington (WA)
  • Nevada (NV)
  • Wyoming (WY)
  • South Dakota (SD)
  • Tennessee (TN)
  • New Hampshire (NH)*

*NH only taxes dividend and interest income

States with Flat Income Tax

  • Colorado (CO): 4.44%
  • Illinois (IL): 4.95%
  • Pennsylvania (PA): 3.07%
  • Utah (UT): 4.95%
  • Kentucky (KY): 5.00%
  • Massachusetts (MA): 5.00%
  • North Carolina (NC): 4.75%
  • Indiana (IN): 3.15%
  • Michigan (MI): 4.25%

Selected States with Progressive Tax Brackets

California has one of the most progressive tax structures:

Tax Rate Single Filers
1.0% 1% on income between $0 and $10,099
2.0% 2% on income between $10,100 and $23,942
4.0% 4% on income between $23,943 and $37,788
6.0% 6% on income between $37,789 and $52,455
8.0% 8% on income between $52,456 and $66,295
9.3% 9.3% on income between $66,296 and $338,639
10.3% 10.3% on income between $338,640 and $406,364
11.3% 11.3% on income between $406,365 and $677,275
12.3% 12.3% on income between $677,276 and $1,000,000

Tax Planning Tips

  • Maximize Pre-Tax Contributions

    Contributing to 401(k)s and HSAs reduces your taxable income, potentially lowering your tax bracket.

  • Harvest Tax Losses

    Offset capital gains by selling investments at a loss to reduce your overall tax burden.

  • Bunch Itemized Deductions

    Group deductible expenses into a single tax year to exceed the standard deduction threshold.

  • Consider Tax-Exempt Investments

    Municipal bonds often provide income that's exempt from federal (and sometimes state) taxes.

  • Take Advantage of Tax Credits

    Tax credits provide dollar-for-dollar reductions in taxes owed, making them more valuable than deductions.

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