The highest federal income tax rate is 37 percent, applied to income above $578,100 for single filers in 2024

The top federal income tax bracket is 37 percent. This rate applies to your income only after you have earned more than $578,100 if you file as single, $867,100 if you file as married filing jointly, or $289,050 if you file as married filing separately. These income thresholds change each year based on inflation.

The 37 percent rate is the highest marginal tax bracket in the federal system. It does not mean you pay 37 percent on all your income — it means you pay 37 percent only on the portion of your income that falls into that bracket. Income below the threshold is taxed at lower rates.

The United States has used a progressive tax system since 1913, meaning higher earners pay a higher percentage. The current top rate of 37 percent has been in place since 2018, when the Tax Cuts and Jobs Act took effect.

Key Takeaways

  • The top federal tax bracket of 37 percent applies only to income above $578,100 for single filers in 2024, not to all your income.
  • Income thresholds for each bracket adjust annually for inflation, so the dollar amount that triggers the top rate changes every year.
  • You only pay the top rate on the portion of your income that exceeds the threshold; all income below it is taxed at lower rates.
  • State and local taxes are separate from federal brackets and vary by where you live and work.
  • The top federal rate has been 37 percent since 2018 and is scheduled to revert to 39.6 percent in 2026 unless Congress acts.

How the progressive tax system works

The United States divides income into brackets, each with its own tax rate. For 2024, there are seven federal brackets: 10 percent, 12 percent, 22 percent, 24 percent, 32 percent, 35 percent, and 37 percent. Your income moves through these brackets from lowest to highest.

If you are a single filer in 2024, you pay 10 percent on income up to $11,600, then 12 percent on income from $11,601 to $47,150, then 22 percent on income from $47,151 to $100,525, and so on. Only the income that lands in the 37 percent bracket — above $578,100 — is taxed at that rate. This structure means that even high earners pay lower rates on their first dollars of income.

Your effective tax rate (the percentage of your total income you actually pay in federal tax) is always lower than your marginal rate (the rate on your last dollar earned). Someone earning $600,000 does not pay 37 percent on all of it.

Income thresholds change every year

The dollar amounts that define each bracket are adjusted annually for inflation. The Internal Revenue Service announces the new thresholds each October or November for the following tax year. In 2024, the top bracket started at $578,100 for single filers. In 2023, it started at $555,100. In 2025, it will be higher.

These adjustments mean that your income can move into a higher bracket even if your salary does not increase, straightforward because the brackets themselves have shifted. Conversely, if your income stays flat while brackets adjust upward, you may move into a lower bracket.

State and local taxes are separate

The 37 percent federal rate is only the federal portion of your tax bill. Most states impose their own income tax on top of it, and some cities do as well. State rates vary widely: California's top rate is 13.3 percent, New York's is 10.9 percent, Texas has no state income tax, and Florida has no state income tax.

If you live in a high-tax state and earn enough to hit the federal 37 percent bracket, your combined federal and state rate can exceed 50 percent on your highest income. The Tax Cuts and Jobs Act capped the deduction for state and local taxes (SALT) at $10,000 per year, which affects high earners in high-tax states.

What happens to the top bracket in 2026

The current bracket structure, including the 37 percent top rate, was created by the Tax Cuts and Jobs Act of 2017. That law is set to expire on December 31, 2025, unless Congress extends it. If it expires without action, the top federal rate will revert to 39.6 percent, and all bracket thresholds will adjust downward.

This means that starting in 2026, more income will be taxed at higher rates unless Congress votes to extend the current structure. The outcome depends on legislative action, which is uncertain. High earners and tax professionals are watching this closely because the change would affect tax planning for 2026 and beyond.

Who actually pays the top bracket

Relatively few people earn enough to pay the 37 percent rate. According to IRS data, fewer than 1 percent of tax filers have income high enough to reach the top bracket. Most of these are business owners, executives, investors, and professionals with high incomes.

The top bracket applies to your ordinary income — wages, business profit, interest, and some other sources. Long-term capital gains (profits from selling investments held more than one year) are taxed at different, usually lower rates: 0 percent, 15 percent, or 20 percent depending on your income level. This distinction matters significantly for wealthy investors.

How to find your own bracket

To find which bracket you fall into, start with your filing status (single, married filing jointly, head of household, or married filing separately) and your taxable income. The IRS publishes tax tables and bracket information each year on its website. You can also use a tax calculator or consult a tax professional.

Your taxable income is not the same as your gross income. It is your income after subtracting deductions — either the standard deduction (a flat amount based on your filing status) or itemized deductions (specific expenses you list). Most people use the standard deduction, which was $13,850 for single filers in 2024.

Frequently Asked Questions

Do I pay 37 percent on all my income if I am in the top bracket?

No. You pay 37 percent only on income above the threshold. All income below the threshold is taxed at lower rates. If you earn $600,000 as a single filer in 2024, you pay 37 percent only on the $21,900 above $578,100. The rest is taxed at 10, 12, 22, 24, 32, and 35 percent depending on which bracket it falls into.

Will my state tax be added on top of the 37 percent federal rate?

Yes. Federal and state income taxes are separate. If you live in California and earn enough for the 37 percent federal bracket, you will also owe California state tax on that income, which can be as high as 13.3 percent. Your total tax rate on your highest income could exceed 50 percent depending on your state.

What is the difference between my marginal rate and my effective rate?

Your marginal rate is the tax rate on your last dollar of income — in this case, 37 percent. Your effective rate is the percentage of your total income you pay in federal tax. Someone earning $600,000 might have an effective rate around 25 to 28 percent, even though their marginal rate is 37 percent.

When will the top bracket change?

The current 37 percent top rate is set to expire on December 31, 2025. If Congress does not extend it, the rate will rise to 39.6 percent starting January 1, 2026. The outcome depends on legislative action, which has not yet been decided.

How do capital gains fit into the tax brackets?

Long-term capital gains (profits from selling investments held more than one year) are taxed separately from ordinary income at rates of 0, 15, or 20 percent, depending on your total income. This is lower than the ordinary income brackets. Short-term capital gains are taxed as ordinary income at your marginal rate.