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What Is Total Tax?
Total tax is the composite total of all taxes owed by a taxpayer for the year. It's progressive and based on the payer's income. The Internal Revenue Service (IRS) publishes income thresholds for seven 澳洲幸运5官方开奖结果体彩网:tax brackets ranging from 10% to 37% each year. The spans of income that apply to each are adjusted annually to keep pac🔥e with inflation.
Key Takeaways
- Total tax is all the tax you owe for a tax year.
- Total tax amounts are laid out in seven tax brackets from 10% to 37% that are based on your income.
- Total tax is how the IRS determines whether you're entitled to a refund or you owe the government money.
- Tax deductions reduce your taxable income. Tax credits reduce the amount of tax you owe.
Understanding Total Tax
The total tax number is the next-to-last step in the tax formula. It accounts for all credits and deductions due to the taxpayer but not any tax payments that were made during the year. Total tax is then compared with those payments made to detཧermine whether a refund is due or a balance is owed.
Total Tax Examples
The lowest tax rate for a married couple filing jointly is 10% in 2025. It applies to income of up to $23,850, an increase from $23,200 in 2024. A couple who earned $19,000 would owe exactly $1,900 in federal income tax assuming they didn't claim any tax deductions or credits. A couple with an annual income of more than $751,600 would pay the highest percentage rate of 37% on each dollar over this amount. The 37% rate applied to income over $731,200 in 2024.
This high-earning couple would owe just 10% on the first $23,850 of their 2025 income, however. They would pay 12%, 22%, 24%, 32%, 35%, or 37% on the balance as their income progresses upward through the seven tax brackets. The only income taxed at 37% would be their earnings over $751,600.
Single Income Tax Rates 2024 and 2025
| Single Taxable Income Tax Brackets and Rates for 2024 | ||
|---|---|---|
| Rate | Taxable Income Bracket | Tax Owed |
| 10% | $0 to $11,600 | $1,160 or 10% of taxable income |
| 12% | $11,601 to $47,150 | $1,160 plus 12% of the excess over $11,600 |
| 22% | $47,151 to $100,525 | $5,426 plus 22% of the excess over $47,150 |
| 24% | $100,526 to $191,950 | $17,168.50 plus 24% of the excess over $100,525 |
| 32% | $191,951 to $243,725 | $39.110.50 plus 32% of the excess over $191,150 |
| 35% | $243,726 to $609,350 | $55,678.50plus 35% of the excess over $243,725 |
| 37% | Over $609,350 | $183,647.25 plus 37% of the excess over $609,350 |
| Single Taxable Income Tax Brackets and Rates for 2025 | ||
|---|---|---|
| Rate | Taxable Income Bracket | Tax Owed |
| 10% | $0 to $11,925 | $1,192 or 10% of taxable income |
| 12% | $11,926 to $48,475 | $1,192 plus 12% of the excess over $11,925 |
| 22% | $48,476 to $103,350 | $5,578.50 plus 22% of the excess over $48,475 |
| 24% | $103,351 to $197,300 | $17,651 plus 24% of the excess over $103,350 |
| 32% | $197,301 to $250,525 | $40,199 plus 32% of the excess over $197,300 |
| 35% | $250,526 to $626,350 | $57,231 plus 35% of the excess over $250,525 |
| 37% | Over $626,350 | $188,769.75 plus 37% of the excess over $626,350 |
Source: Internal Revenue Service.
Married Filinꦡg Jointly Income Tax Rates 2024 and 2025
| Married Filing Jointly Taxable Income Tax Brackets and Rates for 2024 | ||
|---|---|---|
| Rate | Taxable Income Bracket | Tax Owed |
| 10% | $0 to $23,200 | 10% of taxable income |
| 12% | $23,201 to $94,300 | $2,320 plus 12% of the excess over $23,200 |
| 22% | $94,301 to $201,050 | $10,852 plus 22% of the excess over $94,300 |
| 24% | $201,051 to $383,900 | $34,337 plus 24% of the excess over $201,050 |
| 32% | $383,901 to $487,450 | $78,221 plus 32% of the excess over $383,900 |
| 35% | $487,451 to $731,200 | $111,357 plus 35% of the excess over $487,450 |
| 37% | over $731,200 | $196,669.50 plus 37% of the excess over $731,200 |
| Married Filing Jointly Taxable Income Tax Brackets and Rates for 2025 | ||
|---|---|---|
| Rate | Taxable Income Bracket | Tax Owed |
| 10% | $0 to $23,850 | 10% of taxable income |
| 12% | $23,851 to $96,950 | $2,385 plus 12% of the excess over $23,850 |
| 22% | $96,951 to $206,700 | $11,157 plus 22% of the excess over $96,950 |
| 24% | $206,701 to $394,600 | $35,302 plus 24% of the excess over $206,700 |
| 32% | $394,601 to $501,050 | $80,398 plus 32% of the excess over $394,600 |
| 35% | $501,051 to $751,600 | $114,462 plus 35% of the excess over $501,050 |
| 37% | over $751,600 | $202,154.50 plus 37% of the excess over $751,600 |
Source: Internal Revenue Service.
How Deductions Affect Total Tax
Total tax includes income tax, the 澳洲幸运5官方开奖结果体彩网:alternative minimum tax, and 澳洲幸运5官方开奖结果体彩网:self-employment tax. It's calculated after deductions which have been simplified and increased somewhat for most filers.
Married couples filing jointly were entitled to a standard deduction of $13,850 under the pre-2018 tax system. They received a standard deduction of $25,900 in 2022. This increases to $30,000 in 2025.
Important
These amounts may seem significant compared to the pre-2018 figures but the government has also eliminated the personal exemption of $4,050 or $8,100 for a couple.
What's the Difference Between Itemized Deductions and the Standard Deduction?
Claiming itemized deductions requires adding up all the tax-deducti🧸ble expenses you paid during the tax year and qualify t🙈o claim. Some of these include medical expenses, home mortgage interest, and gifts made to qualifying charities.
The standard deduction is a flat figure that a taxpayer can claim based on their filing status and age. It's $15,000 in tax year 2025 for a single filer under age 65.
Both types of deductions are subtracted from taxable income and tax is due on the balance. It's generally recommended that a taxpayer claim whichever deduction amounts to a greater subtraction because claiming both itemized and a standard deduction isn't allowed.
Are Tax Deductions or Tax Credits Better at Reducing Total Tax?
Tax deductions are subtracted from your taxable income so the value of a deduction corresponds with your marginal tax bracket, the percentage you pay on your top dollar of income. You would save 22 cents per dollar claimed if the top dollar of your income falls into the 22% bracket because you've reduced the income to which the rate is applied.
Tax credits are subtracted from the tax you owe so their value is dollar-for-dollar. You would only have to pay $1,000 if you owe the IRS $2,000 and you claim a $1,000 tax credit. Some credits are refundable. The IRS will send you the money if you don't owe any tax or the balance after your tax debt is eliminated if there's any left over.
What Was a Tax Exemption?
Exemptions were tax deductions that could be subtracted from taxable income. A personal exemption was a flat amount per taxpayer and a dependency exemption could be claimed for each of the taxpayer's dependents. A single taxpayer could claim one personal exemption. A married couple filing jointly with two dependent children could claim four exemptions.
Personal exemptions were eliminated from the U.S. tax code from 2018 through 2025 under the terms of the Tax Cuts and Jobs Act (TCJA). They might be reinstated when the TCJA expires, however.
The Bottom Line
Total tax is indeed total but the figures stated here aren't permanent. Many parts of the Tax Cuts and Jobs Act include sunset provisions. The most important from the standpoint of middle-class taxpayers will be the expiration of some of its deduction and exemption rules at the end of 2025.
The total tax for most filers will revert to previous❀ levels unless Congress acts before the expiration but the previous levels will most likely be adjusted for the effect of inflation.
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