Most taxpayers are unaware that the US tax system is progressive. This means that your income is taxed at a higher rate as your income increases. These are called progressive tax brackets.
Jul 1, 2022
In 2020, the tax brackets for filers will be adjusted by tax bracket for all filers.
Most taxpayers are unaware that the US tax system is progressive. This means that your income is taxed at a higher rate as your income increases. These are called progressive tax brackets.
Above are the 2020 tax rates. These are marginal tax rates. Only a slice or your income is taxed at each interval. Not the total amount. For example, if your filing status is "Single" and your taxable income is $40,000. Up to $9,875 is tax at 10%. Everything between $9,876 - $40,000 is tax at 12%.
State tax rates have a similar progressive system, but the tax brackets vary by State. Here's the State of California as an example: https://www.ftb.ca.gov/forms/2019/2019-540-booklet.html#2019-California-Tax-Rate-Schedules