The top federal income tax bracket is 37%, and it applies to income above $578,100 for single filers in 2024
The United States uses a progressive tax system, which means your tax rate increases as your income rises. You do not pay 37% on all your income — you pay 37% only on the dollars that fall into that top bracket. The 37% rate applies to income above $578,100 for single filers, above $693,750 for married couples filing jointly, and above $346,875 for married couples filing separately. These income thresholds change each year based on inflation.
Below the 37% bracket sit six other federal brackets: 10%, 12%, 22%, 24%, 32%, and 35%. Your income moves through each bracket in order. For example, a single filer in 2024 pays 10% on the first $11,600 of income, then 12% on income from $11,601 to $47,150, and so on. Only the portion of income that exceeds $578,100 gets taxed at 37%.
Key Takeaways
- The 37% bracket applies only to income above $578,100 for single filers in 2024, not to your entire income.
- Tax brackets shift upward each year to account for inflation, so the income threshold for the top bracket will be different in 2025.
- State and local taxes are separate from federal brackets and vary widely depending on where you live.
- The top bracket has changed multiple times over the past two decades, from 35% to 39.6% and back to 37%.
How the 37% bracket fits into the full tax structure
The 37% bracket is the final step in a seven-bracket system. To understand where it sits, here is the complete 2024 federal structure for a single filer:
| Tax Rate | Income Range (Single Filer, 2024) |
|---|---|
| 10% | $0 to $11,600 |
| 12% | $11,601 to $47,150 |
| 22% | $47,151 to $100,525 |
| 24% | $100,526 to $191,950 |
| 32% | $191,951 to $243,725 |
| 35% | $243,726 to $365,600 |
| 37% | $365,601 and above |
The brackets for married couples filing jointly are wider at each level, meaning a married couple can earn more before reaching the same tax rate. For 2024, married couples do not hit the 37% bracket until income exceeds $693,750.
Why the top bracket changed in recent years
The 37% rate is not permanent. In 2017, the Tax Cuts and Jobs Act lowered the top rate from 39.6% to 37%, and these rates are set to expire at the end of 2025 unless Congress extends them. If no action is taken, the top bracket will return to 39.6% starting in 2026.
Before 2017, the top rate had been 39.6% since 2013. In earlier decades, the top federal rate was much higher — it reached 70% in the 1970s and 50% through the 1980s. The current 37% rate is historically low by comparison.
State and local taxes are separate from federal brackets
Your federal tax bracket does not include state income tax, local income tax, or other taxes you may owe. Nine states have no state income tax at all: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, Wyoming, and New Hampshire (which taxes only dividends and interest income). The remaining 41 states and Washington, D.C., each have their own tax brackets and top rates.
Some states have a top rate lower than the federal 37% — Colorado tops out at 4.63%, for example. Others are higher: California's top rate is 13.3%, and New York's is 10.9%. If you live in a high-tax state and earn income in the federal 37% bracket, your combined federal and state rate can exceed 50%.
What income counts toward the 37% bracket
The 37% bracket applies to taxable income, not gross income. Taxable income is what remains after you subtract deductions and exclusions. Most people use the standard deduction, which reduces taxable income by $14,600 for single filers and $29,200 for married couples filing jointly in 2024. If you itemize deductions instead, you subtract mortgage interest, property taxes, charitable donations, and other may have access to expenses.
Certain types of income may be taxed at different rates. Long-term capital gains (profits from selling stocks or property held more than one year) are taxed at 0%, 15%, or 20% depending on your income level, not at your ordinary income tax rate. may have access to dividends follow the same structure. This is why high-income earners who earn most of their money from investments may pay a lower effective tax rate than their bracket suggests.
How to calculate your effective tax rate
Your effective tax rate is the percentage of your total income that goes to federal taxes. It is always lower than your marginal rate (the rate of your top bracket) because you pay lower rates on the income below that bracket. For example, a single filer with $600,000 in taxable income does not pay 37% on all of it — they pay 10% on the first $11,600, 12% on the next portion, and so on, with only the income above $578,100 taxed at 37%.
To estimate your effective rate, add up the tax owed in each bracket, then divide by your total taxable income. The IRS provides tax tables and worksheets for this calculation. Many people use tax software or work with a tax professional to determine their actual liability, especially if they have investment income, self-employment income, or other complex sources.
Frequently Asked Questions
Does everyone in the 37% bracket pay the same amount of tax?
No. Two people with the same income in the 37% bracket pay the same federal tax if they have the same filing status and deductions, but their effective rates may differ based on the type of income they earn. Someone whose income comes entirely from wages pays a higher effective rate than someone whose income includes long-term capital gains, because capital gains are taxed at lower rates.
What happens if Congress does not extend the current tax rates after 2025?
The top bracket will return to 39.6% on January 1, 2026, unless Congress votes to extend the current rates. All seven brackets will shift upward. This change would affect anyone earning income above the threshold for the top bracket, increasing their federal tax liability.
Is the 37% bracket the same for everyone, or does it depend on where I live?
The 37% federal bracket is the same everywhere in the United States. However, your state may have its own top bracket that is higher or lower. Your total tax burden depends on both your federal bracket and your state's rate.
How much income do I need to reach the 37% bracket?
For 2024, you need income above $578,100 as a single filer, $693,750 as a married couple filing jointly, or $346,875 as a married person filing separately. These thresholds increase each year. Check the IRS website or your tax software for the current year's brackets.