The Complete US Income Tax Guide (2026): Federal Brackets, Deductions & State Rates

The US federal income tax is a progressive tax on what you earn — wages, salaries, business profit, and most other income. In 2026, seven marginal brackets span 10% to 37%, and a round of inflation adjustments plus the One Big Beautiful Bill Act (OBBBA) changed several thresholds and deductions. This guide walks through how federal income tax works, the 2026 brackets and standard deduction, how state income taxes layer on top, and the legal ways to calculate and reduce what you owe.

How Federal Income Tax Works

Federal income tax is progressive and marginal. You do not pay one rate on all your income; each slice of taxable income is taxed at the rate for that slice.

• Gross income minus above-the-line deductions (traditional 401(k), HSA, half of self-employment tax) = Adjusted Gross Income (AGI).
• AGI minus the standard deduction (or itemized deductions) = taxable income.
• Taxable income flows through the brackets; only the dollars inside each bracket are taxed at that bracket's rate.
• Your marginal rate is the rate on your last dollar; your effective rate is total tax ÷ total income (always lower than the marginal rate).

2026 Federal Tax Brackets

For the 2026 tax year (returns filed in 2027), the seven rates are unchanged (10%, 12%, 22%, 24%, 32%, 35%, 37%), but the bracket thresholds rose with inflation.

Single filers

• 10%: up to $12,400
• 12%: $12,401 – $50,400
• 22%: $50,401 – $105,700
• 24%: $105,701 – $201,775
• 32%: $201,776 – $256,225
• 35%: $256,226 – $640,600
• 37%: over $640,600

Married filing jointly

• 10%: up to $24,800
• 12%: $24,801 – $100,800
• 22%: $100,801 – $211,400
• 24%: $211,401 – $403,550
• 32%: $403,551 – $512,450
• 35%: $512,451 – $768,700
• 37%: over $768,700

Head of household

• 10%: up to $17,700
• 12%: $17,701 – $67,450
• 22%: $67,451 – $105,700
• 24%: $105,701 – $201,775
• 32%: $201,776 – $256,200
• 35%: $256,201 – $640,600
• 37%: over $640,600

Estimate your bill in seconds with our federal bracket calculator or the full income tax calculator.

2026 Standard Deduction & Key Changes

The standard deduction rises in 2026:

• Single: $16,100
• Married filing jointly: $32,200
• Head of household: $24,150
• Married filing separately: $16,100
• Age 65+ adds $2,050 (single) / $1,650 per spouse (joint), plus a new $6,000 senior bonus deduction.

The OBBBA (made permanent from 2025) also added temporary above-the-line deductions for 2025–2028:

• Tips deduction — up to $25,000
• Overtime deduction — up to $12,500 (single) / $25,000 (joint)
• Car loan interest — up to $10,000 on qualifying US-assembled vehicles
• Above-the-line charitable — up to $1,000 (single) / $2,000 (joint), starting 2026
• SALT cap rises to $40,000, so more high-tax-state taxpayers may benefit from itemizing.

State Income Taxes in 2026

Federal tax is only half the story. Most states add their own income tax on top, with rates from 0% to over 13%.

Nine states levy no broad-based individual income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. Two caveats: Washington levies a 7% tax on long-term capital gains above a threshold, and New Hampshire fully repealed its interest-and-dividends tax in 2025.

Highest state rates include California (13.3%), New York (10.9%), New Jersey (10.75%), and Hawaii (11%).

See every state's rate in our US state tax comparison table, and learn why a tax-free state address appeals to mobile earners.

How to Calculate and Reduce Your Income Tax

1. Calculate the exact number

Use our income tax calculator and state tax burden calculator to model federal + state together.

2. Maximize pre-tax contributions

Traditional 401(k), 403(b), and IRA contributions, plus HSA funding, lower your AGI — and therefore your taxable income and bracket exposure.

3. Consider a tax-free residency

If you are location-flexible, living in one of the nine no-income-tax states can permanently lower your bill. Our tax-free address tutorial explains the mechanics.

4. Choose standard vs itemized carefully

With the SALT cap at $40,000, itemizing now beats the standard deduction for more taxpayers in high-tax states. Run both with our tax savings calculator.

5. Capture the new OBBBA deductions

If you earn tips, overtime, or bought a qualifying US-assembled vehicle, the new above-the-line deductions can trim taxable income directly.

50-State Income Tax Directory

Browse the full guide for any state:

Alabama · Alaska · Arizona · Arkansas · California · Colorado · Connecticut · Delaware · Florida · Georgia · Hawaii · Idaho · Illinois · Indiana · Iowa · Kansas · Kentucky · Louisiana · Maine · Maryland · Massachusetts · Michigan · Minnesota · Mississippi · Missouri · Montana · Nebraska · Nevada · New Hampshire · New Jersey · New Mexico · New York · North Carolina · North Dakota · Ohio · Oklahoma · Oregon · Pennsylvania · Rhode Island · South Carolina · South Dakota · Tennessee · Texas · Utah · Vermont · Virginia · Washington · West Virginia · Wisconsin · Wyoming

Summary

Federal income tax in 2026 stays progressive across seven brackets (10%–37%), with a higher standard deduction and a set of new OBBBA deductions. State income taxes then layer on top — from zero in nine states to double digits in California and New York. The smart play is the same whether you are an employee or a business owner: know your bracket, use the right calculators, and plan contributions and residency deliberately. Start with our income tax calculator and explore the 50-state directory above.