How Federal Income Tax Is Calculated
You don’t pay federal income tax on every dollar you earn. The tax applies to your taxable income, which is the income left after you subtract deductions. The rate you pay on that income then depends on which brackets it reaches.
What Progressive Means
A progressive tax charges higher rates as income rises. Under the federal income tax brackets, you pay tax in layers. Each rate applies only to the slice of income inside its bracket. A raise that moves you into a higher bracket won’t raise the tax on your earlier dollars.
The Standard Deduction
The standard deduction is a fixed dollar amount you can subtract from your income before tax is figured. It shrinks your taxable income, and the amount depends on your filing status. Here are the 2026 standard deduction amounts:
| Filing status | 2026 standard deduction |
|---|---|
| Single | $16,100 |
| Married filing separately | $16,100 |
| Married filing jointly | $32,200 |
| Head of household | $24,150 |
If you’re unmarried and support a dependent, you may qualify for the larger head of household deduction.
2026 Federal Income Tax Brackets
Once you know your taxable income, the brackets show what you owe on each layer. These rates apply to 2026 income reported on returns filed in 2027.
| Tax rate | Single filers | Married filing jointly |
|---|---|---|
| 10% | Up to $12,400 | Up to $24,800 |
| 12% | Over $12,400 to $50,400 | Over $24,800 to $100,800 |
| 22% | Over $50,400 to $105,700 | Over $100,800 to $211,400 |
| 24% | Over $105,700 to $201,775 | Over $211,400 to $403,550 |
| 32% | Over $201,775 to $256,225 | Over $403,550 to $512,450 |
| 35% | Over $256,225 to $640,600 | Over $512,450 to $768,700 |
| 37% | Over $640,600 | Over $768,700 |
Say you’re single with $60,000 in taxable income. You’d pay 10% on the first $12,400 ($1,240) and 12% on the next $38,000 ($4,560). The last $9,600 is taxed at 22% ($2,112), for a total of $7,912.
That’s about 13% of your taxable income, even though your top bracket is 22%. For more examples, learn how tax brackets work.
How You Pay Federal Income Tax
Most people pay federal income tax in two stages: small amounts all year, then a final accounting after the year ends.
Withholding From Your Paycheck
Withholding is federal income tax your employer takes out of each paycheck and sends to the government for you. Your employer sets the amount using the information on your Form W-4.
Updating your W-4 changes how much is held back. You can learn how to fill out a W-4 or estimate your paycheck withholding.
Filing Your Annual Return
Each year, you report your income and figure your actual tax on Form 1040. If your withholding was more than your tax, you get a refund. If it was less, you owe the difference.
Your return is generally due April 15, or the next business day if that date falls on a weekend or holiday. Returns for 2026 are generally due April 15, 2027.
Sources
- IRS, IRS releases tax inflation adjustments for tax year 2026, including amendments from the One, Big, Beautiful Bill
- IRS, Federal income tax rates and brackets
- IRS, About Form W-4, Employee’s Withholding Certificate
- IRS, About Form 1040, U.S. Individual Income Tax Return
- IRS, Topic no. 301, When, how and where to file
