How federal income tax is calculated
The United States uses marginal brackets: moving into a higher bracket only taxes the dollars above that line at the higher rate. That's why your effective rate, tax divided by income, is always well below your bracket.
Example: a single filer with $75,000 of income and no pre-tax savings. In 2026, the $16,100 standard deduction leaves $58,900 of taxable income. The first $12,400 is taxed at 10% ($1,240), the next $38,000 at 12% ($4,560) and the last $8,500 at 22% ($1,870), for $7,670, a 10.2% effective rate. In 2027 the same income owes $7,389.50, $280.50 less, because the brackets and the $16,600 standard deduction rose with inflation.
2027 federal income tax brackets
| Rate | Single | Married filing jointly | Head of household |
|---|---|---|---|
| 10% | $0 to $12,800 | $0 to $25,600 | $0 to $18,250 |
| 12% | $12,801 to $52,025 | $25,601 to $104,050 | $18,251 to $69,650 |
| 22% | $52,026 to $109,125 | $104,051 to $218,250 | $69,651 to $109,100 |
| 24% | $109,126 to $208,325 | $218,251 to $416,650 | $109,101 to $208,300 |
| 32% | $208,326 to $264,550 | $416,651 to $529,100 | $208,301 to $264,550 |
| 35% | $264,551 to $661,375 | $529,101 to $793,650 | $264,551 to $661,350 |
| 37% | Over $661,375 | Over $793,650 | Over $661,350 |
Standard deduction for 2027: $16,600 single, $33,200 married filing jointly, $24,925 head of household. The Child Tax Credit is $2,300 per child under 17, up to $1,800 of it refundable. Compare with 2026 or see the full 2027 tables.
Which year do I need?
The tax return you file in early 2027 covers income earned in 2026, so use 2026 for your refund estimate. Paychecks from January 2027 are withheld on the 2027 figures, so use 2027 for planning next year. The calculator switches to 2027 automatically on January 1.
What this estimate leaves out
- Other credits, such as the Earned Income Tax Credit, education credits and the credit for other dependents.
- Self-employment tax (use the self-employment tax calculator) and capital gains rates (use the capital gains tax calculator).
- The newer deductions for tips, overtime, car loan interest and seniors, and the alternative minimum tax.
- State income tax; the paycheck calculator includes it.
Frequently asked questions
What are the 2027 tax brackets?
10%, 12%, 22%, 24%, 32%, 35% and 37%. For single filers, 10% covers taxable income up to $12,800, 12% up to $52,025, 22% up to $109,125, and 37% starts above $661,375.
What is the standard deduction for 2027?
$16,600 for single filers and married filing separately, $33,200 for married filing jointly and $24,925 for heads of household.
Does moving into a higher tax bracket lower my take-home pay?
No. Only the dollars above the bracket line are taxed at the higher rate, so earning more always leaves you with more after tax.
What is the difference between my tax bracket and my effective tax rate?
Your bracket is the rate on your last dollar of taxable income. Your effective rate is your total tax divided by your income, which is lower because most of your income is taxed in the lower brackets.
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