Your tax bracket determines how much you will pay in federal income tax. In the US we have a progressive tax system, which means as your income goes up, your tax bracket increases. However, your “tax bracket” does not apply to your entire income, but is tier-based. For example, if you are a single filer and make over $640,600 in 2026, you are in the highest tax bracket of 37%. But only income above that threshold is taxed at 37%, and income under that threshold is taxed at lower rates (a portion is taxed at 10%, 12%, 22%, 24%, 32%, and 35%).
When determining a person’s taxes, there are a couple of different values that are used. These include taxable income, adjusted gross income (AGI), and modified adjusted gross income (MAGI.)
Our Money Guy Tax Guide (2026) contains the latest tax brackets, deductions, contribution limits, and more. As noted in the tax guide, your marginal tax bracket is determined by your “taxable income.” Certain tax-related calculations are dependent upon what the AGI or the MAGI.
Check out the video below for more tax tips!
