Federal Income Tax Rates for the Year 2017

How to Calculate Federal Tax Rates in 2017

US tax forms
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The federal government taxes personal income using a graduated scale in the U.S. Personal income tax rates start at 10 percent and gradually increase to 15 percent, then 25 percent, 28 percent, then 33 percent and 35 percent before reaching a top rate of 39.6 percent. 

Each tax rate applies to a specific range of income. This range is called a tax bracket. Where each tax bracket begins and ends depends on a person's filing status.

Tax rates also vary depending on an individual's type of income. Ordinary tax rates apply to most types of income. A separate tax rate schedule applies to income from long-term capital gains and qualified dividends.

Let's first get an overview of all the tax rates for the year 2017. The charts below, grouped by filing status, show the tax rates on ordinary income in the first column, the rates for long-term capital gains and qualified dividends in the second column, and the income levels that these rates apply to in the third column. It's important to note that the dollar amounts represent taxable income, which is total income after various deductions have been subtracted.

Tax Rate Charts Are Separated By Filing Status:

Single Taxable Income Brackets

Ordinary Income

Long Term Capital Gains & Qualified Dividends

Taxable Income Between

10%

0%

$0 to $9,325

15%

0%

$9,325 to $37,950

25%

15%

$37,950 to $91,900

28%

15%

$91,900 to $191,650

 33%

15%

$191,650 to $416,700

35%

15%

$416,700 to $418,400

39.6%

20%

$418,400

 

 Head of Household Taxable Income Brackets

Ordinary Income

Long Term Capital Gains & Qualified Dividends

Taxable Income Between

10%

0%

$0 to $13,350

15%

0%

$13,350 to $50,800

25%

15%

$50,800 to $131,200

28%

15%

$131,200 to $212,500

33%

15%

$212,500 to $416,700

 35%

15%

$416,700 to $444,550

39.6%

20%

$444,550+

 

Married Filing Separately Taxable Income Brackets

Ordinary Income

Long Term Capital Gains & Qualified Dividends

Taxable Income Between

10%

0%

$0 to $9,325

15%

0%

$9,325 to $37,950

25%

15%

$37,950 to $76,550

28%

15%

$76,550 to $116,675

33%

15%

$116,675 to $208,350

35%

15%

$208,350 to $235,350

39.6%

20%

$235,350+

 

Married Filing Jointly and Qualifying Widows/Widowers Brackets 

Ordinary Income

Long Term Capital Gains & Qualified Dividends

Taxable Income Between

10%

0%

$0 to $18,650

15%

0%

$18,650 to $75,900

25%

15%

$75,900 to $153,100

28%

15%

$153,100 to $233,350

33%

15%

$233,350 to $416,700

35%

15%

$416,700 to $470,700

39.6%

20%

$470,700+

 

This tax rate chart emphasizes the mechanics of how to calculate the federal income tax. We start by figuring out a person's taxable income, and after we have identified which bracket the taxable income falls in, we work across the row from left to right.

2017 Ordinary Tax Rates for Single Filing Status
[Tax Rate Schedule X, Internal Revenue Code section 1(c)]

If Your Taxable Income Is Between

Subtract Your Taxable Income From

Multiply Amount By

Additional Amount

$0 and $9,325

Taxable Income Minus $0

× 10%

$0

$9,325 and $37,950

Taxable Income Minus $9,325

× 15%

$932.50

$37,950 and $91,900

Taxable Income Minus $37,950

× 25%

$5,226.25

$91,900 and $191,650

Taxable Income Minus $91,900

× 28%

$18,713.75

$191,650 and $416,700

Taxable Income Minus $191,650

× 33%

$46,643.75

$416,700 and $418,400

Taxable Income Minus $416,700

× 35%

$120,910.25

$418,400+

Taxable Income Minus $418,400

× 39.6%

$121,505.25

 

(For simplicity's sake, this chart assumes that all income is ordinary income, not capital gains income.)

To use this table, we take taxable income and subtract the amount where the relevant tax bracket begins in the first two columns. This leaves just the taxable income within that tax bracket. We multiply this amount by the tax rate for that bracket in the third column. This is the amount of tax on the income within that tax bracket. We add to this amount the cumulative federal tax on income that falls in the lower tax rates -- this is the amount indicated in the fourth column. This results in the total amount of federal income tax in the last column.

For example, suppose that Edith, a single person, has taxable income of $100,000. This falls within the fourth tax bracket, which ranges from $91,900 to $191,650 of taxable income. Assuming that all Edith's income is subject to the ordinary tax rates, we would calculate her federal income tax like this:

Example:

If your taxable income is $100,000, then it fits in the bracket between $91,900 and $191,650. Subtract the $100,000 minus the lower part of the bracket ($91,900) for a total of $8,100 -- the total income that falls into this bracket. This is multiplied by the rate for this bracket (28 percent) to get $2,268. Add the additional amount in the last column of $18,713.75 -- the total tax owed on her income that falls in the lower tax brackets -- for a final sum of $20,981.75.

The results of our calculation:

  • Edith is responsible for paying $20,981.75 of federal income tax on taxable income of $100,000.
  • Edith's taxable income falls within the 28 percent tax bracket.
  • Her income over $91,150 is taxed at the 28 percent rate.
  • The rest of her income is taxed at the lower 10 percent, 15 percent and 25 percent rates.
  • Edith's effective or average tax rate is her total tax liability divided by her taxable income, or 20,981.75 divided by 100,000 equaling 20.98175 percent. This effective tax rate is a blend of all the tax rates that apply to her income.

Other Tax Rates in Effect for 2017

In addition to the federal income taxes on ordinary income, there are other taxes that may apply to personal income:

  • The Social Security tax rate is 12.4 percent on wages and self-employment income up to the annual Social Security wage base of $127,200. This means that the maximum Social Security tax paid by employees is $7,886.40, the maximum paid by employers is $7,886.40, and the maximum paid by self-employed persons is $15,772.80.
  • The Medicare tax rate is 2.9 percent on wages and self-employment income.
  • The Additional Medicare tax rate is 0.9 percent on wages and self-employment income over the following thresholds: Married Filing Jointly $250,000, Single or Head of Household or Qualifying Widow(er) $200,000, and Married Filing Separately $125,000.
  • Alternative Minimum Tax: 26 percent on taxable income (as recalculated under the AMT rules) under $93,900; 28 percent on AMT taxable income over $93,900. For Single, Head of Household, Married Filing Jointly, and Qualifying Widow(er): 26 percent on AMT taxable income under $187,800; 28 percent on AMT taxable income over $187,800. 
  • Net investment income is taxed at a rate of 3.8 percent on the lower of net investment income or modified adjusted gross income over the following thresholds: Married Filing Jointly or Qualifying Widow(er) $250,000, Single or Head of Household $200,000, and Married Filing Separately $125,000.
  • Capital Gains tax rates vary depending on whether the gains are short-term or long-term. Short-term gains are taxed at ordinary income tax rates. Long-term gains and qualified dividends taxed at 0 percent when taxable income falls in the 10 to 15 percent marginal tax brackets. This increases to 15 percent when taxable income falls in the 25, 28, 33 or 35 percent marginal tax brackets, and to 20 percent when taxable income falls in the 39.6 percent marginal tax bracket. Tax rates are 25 percent on depreciation recapture, 28 percent on collectibles and 28 percent on qualified small business stock after exclusion. 

How to Utilize Your Marginal Tax Rates

Individuals can use the tax rate schedules in a number of ways to help plan their finances. You can use these tax rates to figure out how much tax you'll pay on extra income you earn. For a taxpayer in the 25 percent tax bracket, extra income will be taxed at 25 percent until the taxpayer's income reaches the next tax bracket of 28 percent.

Remember that different intervals of income are taxed at different rates. The income intervals at which the rates apply are based on a person's filing status.

You can also use these tax rates to figure out how much tax you'll save by increasing your deductions. A taxpayer in the 28 percent tax bracket will save 28 cents in federal tax for every dollar spent on a tax-deductible expense, such as mortgage interest or charity.

Marginal tax rates interact with other tax rates, especially the alternative minimum tax. The minimum tax functions to eliminate the tax savings of certain types of deductions.

Source: The official tax brackets for 2017 are published by the Internal Revenue Service in Revenue Procedure 2016-55

Please consult tax calculation worksheets in the 2017 Instructions for Form 1040 and the 2017 Tax Tables to compute your actual income tax, Tax computation worksheets are also provided in the 2017 edition of Publication 505, Tax Withholding and Estimated Tax.