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Federal Income Tax Brackets (2024)

Quick Reference

Tax Rates (2024)

Seven marginal tax rates: 10%, 12%, 22%, 24%, 32%, 35%, 37%

Single Filers

  • 10% on income up to $11,600
  • 12% on income $11,601 to $47,150
  • 22% on income $47,151 to $100,525
  • 24% on income $100,526 to $191,950
  • 32% on income $191,951 to $243,725
  • 35% on income $243,726 to $609,350
  • 37% on income over $609,350

Married Filing Jointly

  • 10% on income up to $23,200
  • 12% on income $23,201 to $94,300
  • 22% on income $94,301 to $201,050
  • 24% on income $201,051 to $383,900
  • 32% on income $383,901 to $487,450
  • 35% on income $487,451 to $731,200
  • 37% on income over $731,200

Married Filing Separately

  • 10% on income up to $11,600
  • 12% on income $11,601 to $47,150
  • 22% on income $47,151 to $100,525
  • 24% on income $100,526 to $191,950
  • 32% on income $191,951 to $243,725
  • 35% on income $243,726 to $365,600
  • 37% on income over $365,600

Head of Household

  • 10% on income up to $16,550
  • 12% on income $16,551 to $63,100
  • 22% on income $63,101 to $100,500
  • 24% on income $100,501 to $191,950
  • 32% on income $191,951 to $243,700
  • 35% on income $243,701 to $609,350
  • 37% on income over $609,350

Long-Term Capital Gains and Qualified Dividends

Three preferential rates: 0%, 15%, 20%

0% Rate Applies: - Single: taxable income up to $47,025 - Married Filing Jointly: taxable income up to $94,050 - Married Filing Separately: taxable income up to $47,025 - Head of Household: taxable income up to $63,000

15% Rate Applies: - Single: taxable income $47,026 to $518,900 - Married Filing Jointly: taxable income $94,051 to $583,750 - Married Filing Separately: taxable income $47,026 to $291,850 - Head of Household: taxable income $63,001 to $551,350

20% Rate Applies: - Single: taxable income over $518,900 - Married Filing Jointly: taxable income over $583,750 - Married Filing Separately: taxable income over $291,850 - Head of Household: taxable income over $551,350

Net Investment Income Tax (NIIT)

Additional 3.8% tax on net investment income

Applies when MAGI exceeds: - Single: $200,000 - Married Filing Jointly: $250,000 - Married Filing Separately: $125,000 - Head of Household: $200,000

Tax Amount: - 3.8% on lesser of: - Net investment income, OR - MAGI exceeding threshold

Alternative Minimum Tax (AMT)

2024 AMT Exemption Amounts: - Single: $85,700 - Married Filing Jointly: $133,300 - Married Filing Separately: $66,650

Exemption Phase-Out Begins: - Single: $609,350 - Married Filing Jointly: $1,218,700 - Married Filing Separately: $609,350

AMT Rates: - 26% on AMT income up to $232,600 (all filing statuses except MFS) - 28% on AMT income over $232,600 - MFS: 26% on AMT income up to $116,300; 28% over $116,300

Details

Marginal vs. Effective Tax Rate

Marginal Rate: Tax rate paid on the next dollar of income (the highest bracket reached)

Effective Rate: Total tax divided by total taxable income (average rate paid)

The US tax system uses graduated marginal rates. Income in lower brackets is taxed at lower rates even when total income reaches higher brackets.

Example (Single Filer, $75,000 taxable income in 2024): - First $11,600 taxed at 10% = $1,160 - Next $35,550 taxed at 12% = $4,266 ($47,150 - $11,600 = $35,550) - Remaining $27,850 taxed at 22% = $6,127 ($75,000 - $47,150 = $27,850) - Total tax = $11,553 - Marginal rate = 22% - Effective rate = $11,553 / $75,000 = 15.4%

Capital Gains Taxation

Capital assets held for more than one year qualify for long-term capital gains treatment.

Long-Term Capital Gains: Assets held > 1 year, taxed at 0%, 15%, or 20%

Short-Term Capital Gains: Assets held ≤ 1 year, taxed as ordinary income at regular rates

Net Capital Losses: Can offset ordinary income up to $3,000 per year ($1,500 if MFS). Excess losses carry forward indefinitely.

Collectibles: Long-term gains on collectibles (art, antiques, coins, etc.) taxed at maximum 28% rate

Unrecaptured Section 1250 Gain: Depreciation recapture on real estate taxed at maximum 25% rate

Qualified Small Business Stock (QSBS): Potential exclusion of 50%, 75%, or 100% of gain under IRC § 1202

Net Investment Income Tax (NIIT) - Additional Details

NIIT is 3.8% surtax on investment income for high earners.

Net Investment Income Includes: - Interest, dividends, annuities - Royalties - Rents (unless from active trade or business) - Capital gains (unless from active trade or business) - Passive activity income

Not Investment Income: - Wages, salaries, self-employment income - Unemployment compensation - Social Security benefits - Alimony - Tax-exempt interest (though may increase MAGI) - Distributions from qualified retirement plans

Special Rules: - Net investment income reduced by properly allocable deductions - Day traders and active securities traders may avoid NIIT if material participation requirements met - Real estate professionals may avoid NIIT on rental income if material participation requirements met

Alternative Minimum Tax (AMT) - Additional Details

AMT is parallel tax system ensuring minimum tax payment.

AMT Calculation: 1. Start with regular taxable income 2. Add back certain deductions (AMT adjustments and preferences) 3. Subtract AMT exemption 4. Apply AMT rates (26% or 28%) 5. Compare to regular tax; pay higher amount

Common AMT Adjustments: - State and local tax deduction (added back) - Miscellaneous itemized deductions (added back, though mostly suspended 2018-2025) - Personal exemptions (added back, though suspended 2018-2025) - Standard deduction (added back if AMT calculation uses itemized) - Incentive stock option (ISO) spread (added as preference item) - Private activity bond interest (added as preference item)

AMT Credits: - AMT paid in prior years due to timing differences (not exclusion items) can be claimed as credit in future years - No carryback; indefinite carryforward

Impact of TCJA (2018-2025): - Higher exemption amounts - Higher phase-out thresholds - SALT deduction limited to $10,000 (reduces AMT exposure) - Result: Fewer taxpayers subject to AMT compared to pre-2018

Citations

Internal Revenue Code: - IRC § 1 - Tax Imposed (ordinary income rates, capital gains rates) - IRC § 1(h) - Maximum Capital Gains Rate - IRC § 55 - Alternative Minimum Tax Imposed - IRC § 55(d) - AMT Exemption Amount - IRC § 56 - AMT Adjustments - IRC § 57 - AMT Items of Tax Preference - IRC § 1202 - Qualified Small Business Stock - IRC § 1250 - Gain from Dispositions of Certain Depreciable Realty (recapture) - IRC § 1411 - Net Investment Income Tax

IRS Revenue Procedures: - Rev. Proc. 2023-34 (November 2023) - 2024 inflation adjustments

IRS Publications: - Publication 17 - Your Federal Income Tax (For Individuals) - Publication 505 - Tax Withholding and Estimated Tax - Publication 550 - Investment Income and Expenses - Publication 551 - Basis of Assets

IRS Forms: - Form 1040 and Instructions - US Individual Income Tax Return - Schedule D - Capital Gains and Losses - Form 8960 - Net Investment Income Tax - Form 6251 - Alternative Minimum Tax (Individuals)