Quick Summary
The US income tax system uses different tax brackets, meaning your income is taxed at different rates depending on how much taxable income you earn.
Tax Slabs For The Year 2025
| For Single | For Married | For Head of Household | Tax Rate |
| Up to $11,925 | $0 to 23,850 | $0 to 17,000 | 10% |
| $11,926 – $48,475 | $23,851 to 96,950 | $17,001 to 64,850 | 12% |
| $48,476 – $103,350 | $96,951 to 206,700 | $64,851 to 103,350 | 22% |
| $103,351 – $197,300 | $206,701 to 394,600 | $103,351 to 197,300 | 24% |
| $197,301 – $250,525 | $394,601 to 501,050 | $197,301 to 250,500 | 32% |
| $250,526 – $626,350 | $501,051 to 751,600 | $250,501 to 626,350 | 35% |
| Above $626,350 | Above $751,601 | Above $626,351 | 37% |
Preferential Tax Rates
Dividends received from a domestic corporation, tax rate is 20%.
Capital Gains Tax Rate:
- Long Term Capital Gain @ 20%, when the assets are held for more than 12 months.
- Short-term gains are taxed at standard individual income tax rates, when the assets are held for less than 12 months.
Alternative Minimum Tax (AMT)
The AMT is a separate tax calculation in the US and it ensures high-income earners pay a baseline amount of tax by limiting certain deductions.
- Rates: AMT has two tax rates i.e., 26% and 28%.
- Threshold: For 2025, 28% rate applies to taxable incomes exceeding $239,100 ($119,550 for married filing separately).
- Exemption: $137,000 for married couples filing jointly and $88,100 for other taxpayers (other than estates and trusts).
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