What are the US federal income tax brackets for 2024?
For single filers in 2024: 10% on income up to $11,600; 12% on $11,601–$47,150; 22% on $47,151–$100,525; 24% on $100,526–$191,950; 32% on $191,951–$243,725; 35% on $243,726–$609,350; 37% above $609,350. Married filing jointly thresholds are roughly double.
What is the difference between marginal and effective tax rate?
Marginal rate is the rate applied to your last (highest) dollar of income. Effective rate is total tax ÷ total income — always lower than marginal. A $100,000 income may be in the 22% marginal bracket but have only a 15% effective rate because lower income is taxed at 10% and 12%. This is why "moving to a higher bracket" rarely hurts as much as feared.
Does moving to a higher tax bracket affect all of my income?
No — the US uses a progressive (marginal) system. Each bracket rate only applies to income within that range. If you earn $50,000 and move to $55,000, only the additional $2,850 (above the $47,150 threshold) is taxed at 22%. The rest stays taxed at 10% and 12%. You always keep more money by earning more.
What is the standard deduction for 2024?
For 2024: $14,600 (single), $21,900 (head of household), $29,200 (married filing jointly or qualifying surviving spouse). These are subtracted from gross income before calculating tax. Itemize deductions only if they exceed these amounts — most people benefit from the standard deduction.
How can I reduce my effective tax rate legally?
Contribute to tax-deferred accounts (401(k), IRA, HSA) which reduce taxable income dollar-for-dollar. Maximise the 401(k) limit ($23,000 in 2024) to potentially save $5,060–$8,510 in federal tax. Long-term capital gains (assets held >1 year) are taxed at 0–20%, much lower than ordinary income rates. Tax-loss harvesting can also offset gains.