Glossary
Tax bracket
Definition
A tax bracket is a range of taxable income taxed at one rate. Federal brackets are set by filing status and indexed annually; for 2026 they follow IRS Rev. Proc. 2025-32 as amended by the 2025 tax law. Moving into a higher bracket only affects the income above the threshold.
How tax bracket works
There are seven federal rates. Each filing status has its own thresholds, and married couples filing jointly generally have thresholds twice those of single filers in the lower brackets.
Bracket management, keeping income below a threshold through timing, is a core planning technique.
Why it matters to a firm
Clients fear 'moving into a higher bracket'. Showing that only the excess is taxed at the higher rate is quick, reassuring advice.
| 2026 figure | Source |
|---|---|
| Federal income tax brackets and standard deduction: 2026 brackets and standard deductions (Rev. Proc. 2025-32) | IRS Rev. Proc. 2025-32, as amended by the 2025 tax law |
Questions about tax bracket
How many federal brackets are there?
Seven.
Are brackets adjusted for inflation?
Yes, annually.
Do states use the same brackets?
No.
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Related terms: Marginal tax rate · Taxable income
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