What is the federal tax
Executive summary
The federal income tax in the United States is a progressive, marginal tax system with seven ordinary-income rates for tax year 2026: 10%, 12%, 22%, 24%, 32%, 35% and 37% [1] [2]. The IRS adjusted the 2026 bracket thresholds and related provisions for inflation and statutory changes, preserving a top marginal rate of 37% that begins at roughly $640,600 for single filers and $768,700 for married filing jointly [3] [4].
1. What "the federal tax" refers to and how it’s structured
When reporters say “the federal tax” they most often mean the federal individual income tax, which taxes taxable income after deductions and credits using graduated brackets so that different slices of income are taxed at different rates (marginal taxation) rather than one flat rate on all income [5] [2]. For 2026 the system uses seven ordinary-income tax rates — 10%, 12%, 22%, 24%, 32%, 35% and 37% — applied to income ranges that differ by filing status and were inflation-adjusted by the IRS [1] [2].
2. The practical meaning of the brackets for earners
A taxpayer’s “bracket” denotes the rate applied to the last dollar earned, not the share paid on all income: a single filer with taxable income inside the 22% bracket will still pay 10% and 12% on the lower slices of income and only 22% on the portion that falls in that bracket; the IRS publishes thresholds and the standard deduction amounts that determine taxable income each year [5] [2]. For 2026 the IRS raised the upper bound of the lowest bracket to $12,400 for singles and increased thresholds across brackets modestly — roughly 2–4% in many cases — to reflect inflation, which can modestly increase take-home pay if wages don’t rise faster than those adjustments [6] [7].
3. Top rates, thresholds and recent policy context
The maximum ordinary income tax rate remains 37% for 2026, with that top marginal rate kicking in at about $640,600 for single filers and $768,700 for married couples filing jointly; those thresholds and other figures were updated by the IRS and reflect changes from recent legislation often referenced as the One Big Beautiful Bill Act (OBBBA) which also altered certain credits and deductions [3] [4] [8]. Media and advisers note that although bracket thresholds rose, the increases are a lagging measure of inflation and may not fully offset household-level price pressures for those whose incomes rose faster than the adjustments [7].
4. Other federal tax elements that affect what people actually pay
Beyond ordinary rates, the federal tax landscape includes rules that modify liability: the Alternative Minimum Tax (AMT) operates at separate rates (26% and 28%) with exemptions for lower- and middle-income taxpayers but phase-outs for high earners [1]; credits like the Earned Income Tax Credit and changes to employer-related credits and retirement contribution limits also shift net tax burdens year to year [3] [9]. Reporting highlights that changes to deductions, credits, capital gains brackets, and estate and gift exemptions were part of the IRS updates for 2026 and can materially change effective tax bills even if headline bracket rates stay the same [4] [9].
5. What remains contentious or unclear in popular coverage
News coverage emphasizes that bracket inflation adjustments can produce slightly larger paychecks for some, but analysts caution that those gains are uneven and depend on filing status, whether taxpayers itemize, and interaction with other provisions such as the AMT or new credits; some outlets foreground political narratives — crediting legislative changes to particular administrations — which can carry implicit agendas in how benefit or burden is framed [7] [8]. The sources make clear the technical numbers for 2026 but do not provide a complete picture of individual effective tax rates across income groups, so granular distributional impacts require further data beyond these release summaries [1] [4].