New Tax Bracets from the IRS
December 22nd, 2025 at 8:55:06 AM
permalink
The brackets are a bit higher this year, with the 10% bracket rising 3.9% while the 35% braket rose 2.3% to $640,000
Taxable income( after deductions and exemptions)
Under $50,000 is 10% or 12%
Between $50001 and $105,000 22%
$105,001-$201,000 24%
$201-256,000 32%
$256-$640 35%
640 and up- 37%
A person who makes $1,000,000 does not pay 37% on that million. They would pay 12% on the first $50,000, 22% on the next $65,000,
24% on the next $96,000, ect, ect.
That is the theoretical. In reality, the more income you have, the more opportunity to invest it in ways that shield future income from these rates. A person who collects a $1,000,000 salary is subject to more taxes than an investor who collects $1,000,000 in capital gains.
Taxable income( after deductions and exemptions)
Under $50,000 is 10% or 12%
Between $50001 and $105,000 22%
$105,001-$201,000 24%
$201-256,000 32%
$256-$640 35%
640 and up- 37%
A person who makes $1,000,000 does not pay 37% on that million. They would pay 12% on the first $50,000, 22% on the next $65,000,
24% on the next $96,000, ect, ect.
That is the theoretical. In reality, the more income you have, the more opportunity to invest it in ways that shield future income from these rates. A person who collects a $1,000,000 salary is subject to more taxes than an investor who collects $1,000,000 in capital gains.
The older I get, the better I recall things that never happened
December 22nd, 2025 at 9:03:09 AM
permalink
The $640K question is how much Federal tax is owed. For a single person with a standard deduction of $16,100, it would be around $192.655, or 30.1%. Throw in your state, and local taxes you're probably looking at a higher number, over 40%. But if you live in a state that doesn't levy state and local taxes, you'll be back at 30.1%.
Topics such as AGI and session reporting are not covered here.
Topics such as AGI and session reporting are not covered here.
