Marginal Tax Rate

Definition

The tax rate applied to your next dollar of income, determined by federal income tax brackets. The 2026 brackets for a single filer range from 10% (up to $11,925) to 37% (above $626,350). Crucially, hitting a higher bracket does not retax your entire income, only the dollars inside that bracket are taxed at the new rate. Someone earning $100,000 pays 10% on the first $11,925, then 12% up through $48,475, then 22% through $103,350, producing an effective rate of roughly 17%, not 22%.