![]() These brackets represent the percentage of taxes you pay based on your taxable income and are referred to as marginal tax rates. If you make $520,000 a year as a single filer, you are in the 37% tax bracket. If you earn $35,000 a year as a single filer, you are in the 12% tax bracket. ![]() In 2021, there are seven tax brackets ranging from 10% to 37%. ![]() The more money you earn, the higher your tax rate is and the more taxes you pay to the IRS. The United States has a progressive tax system. Understanding marginal and effective tax rates is important for tax planning purposes however, many taxpayers don't fully understand the differences.
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