What's My 2025 Tax Bracket?

Each year, the IRS reviews and adjusts specific tax provisions for inflation. Below are the latest updates for the 2025 tax year, including common income, dividend, and capital gain tax brackets.

When discussing tax brackets, which are updated annually, it can be useful to simplify the starting and ending points of each range for clarity. For example, the 24% income tax bracket for married filers starts at $206,700 and ends at $394,600. Rounding these figures to a simpler range, such as "$200,000 to $400,000," can make initial conversations about tax planning more straightforward and effective.

What bracket will your income fall into below?

Rounded Tax Brackets (2025, Federal)

Open Window's Rounded Rates on Taxable Income & Gains

Married (2025)

Single/Unmarried (2025)

For non-rounded tax brackets, see below and www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2025

◊ Qualified Business Income Deduction (Sec. 199A) is reduced above income limits < $197,300 Single Filers < $394,600 Married Filers.

[1, 3] Net Investment Income Tax (NIIT) or “Medicare” surtax of +3.8% on net investment income (or MAGI – threshold) for incomes >$200,000 Single Filers, >$250,000 Married Filers. 

[2, 4] 20% rates for incomes ≥$533,400 Single Filers, ≥$600,050 Married Filers.

How Tax Brackets Work (2025, Federal)

To determine your tax liability, the government divides your taxable income into segments, or tax brackets. Each segment is taxed at its corresponding rate. The federal income tax rates range from 10% to 37%.

In the image below, a married couple earned over $500,000, enough to fill the 10%, 12%, 22%, 24%, and 32% tax brackets to land them in the 35% income tax bracket.

One key aspect of our tax system is that you don't pay the highest 35% tax rate on all your income. Instead, only the portion of your income that falls within a specific bracket is taxed at that rate. In our example below, $18,837 of income was subject to taxd in the 35% bracket. Continuing down the image, $106,450 of income was taxed in the 32% bracket, $187,900 was taxed in the 24% bracket, $109,750 was taxed in the 22% bracket, $73,100 was taxed in the 12% bracket, $23,850 was taxed in the 10% bracket. Not pictured is the $30,000 of income subject to a 0% tax rate; income that was ignored due to the 2025 standard deduction of $30,000.

How Gains Stack on Income (2025, Federal)

To determine your total tax liability, capital gains "stack" on top of your ordinary income. Your ordinary earned income is taxed first, then once all earned income is accounted for, any capital gains are taxed next.

Gains are also applied to a different set of tax rates. The tax rates for capital gains are 0%, 15%, or 20%.  

In the image below, the same married couple from above (earning over $500,000 of income) sold their home, incurring a capital gain of $400,000. To determine taxation, this gain was stacked on top of their $500,000 income filling the small sliver of the remaining 15% capital gains bracket. Most of the gain landed in the 20% capital gains tax bracket. However, similar to income tax, you don't pay the highest 20% tax rate on all of your capital gain. Instead, only the portion that falls within that bracket is taxed at that rate. Additionally, they were unable to benefit from the 0% capital gains tax bracket because their earned income stacks first. Without earned income, the 0% capital gain bracket would have been available to them.

How Congress Increases Taxes Without Changing Brackets (2025, Federal)

An additional and separate 3.8% tax rate is applied on top of ordinary income and capital gains taxes for individuals with high incomes.

The 3.8% Net Investment Income Tax (NIIT) applies to the lesser of your net investment income (such as capital gains, dividends, and rental income) or the amount by which your modified adjusted gross income (MAGI) exceeds the applicable threshold: $250,000 for married couples filing jointly, $200,000 for single/unmarried individuals.

Net Investment Income Tax (NIIT) is an additional and separate tax rate that can increase the effective tax rate on existing income and capital gains.

In the image below, the same married couple from above (earning over $500,000 of income and with a $400,000 capital gain) sees an increase from a 32.0% marginal income tax rate to a 35.8% income tax rate. Their 20.0% marginal capital gain tax rate increases to 23.8%.

Exact Tax Brackets (2025, Federal)

Exact Rates on Taxable Income & Gains

While the above rates and brackets are at the federal level, different states might have their own brackets and rates.

Ordinary Earned Income Brackets

The tax year 2025 adjustments described below generally apply to taxable income (income earned after deductions) from Ordinary Earned Income, Short-term Capital Gains, and Non-Qualified Dividends:

0% Income Tax Rate (Standard Deduction)

• Single/Unmarried Individuals: First $15,000
• Heads of Households: First $22,500
• Married Individuals Filing Jointly: First $30,000
• Estates and Trust: n/a

10% Income Tax Rate

• Single/Unmarried Individuals: from taxable income of $0 to $11,925
• Heads of Households: from taxable income of $0 to $17,000
• Married Individuals Filing Jointly: from taxable income of $0 to $23,850
• Estates and Trust: from taxable income of $0 to $3,150

12% Income Tax Rate

• Single/Unmarried Individuals: from $11,925 to $48,475
• Heads of Households: from $17,000 to $64,850
• Married Individuals Filing Jointly: from $23,850 to $96,950
• Estates and Trust: n/a

22% Income Tax Rate

• Single/Unmarried Individuals: from $48,475 to $103,350
• Heads of Households: from $64,850 to $103,350
• Married Individuals Filing Jointly: from $96,950 to $206,700    
• Estates and Trust: n/a

24% Income Tax Rate

• Single/Unmarried Individuals: from $103,350 to $197,300  
• Heads of Households: from $103,350 to $197,300
• Married Individuals Filing Jointly: from $206,700 to $394,600
• Estates and Trust: from $3,150 to $11,450

32% Income Tax Rate

• Single/Unmarried Individuals: from $197,300 to $250,525
• Heads of Households: from $197,300 to $250,500
• Married Individuals Filing Jointly: from $394,600 to $501,050   
• Estates and Trust: n/a

35% Income Tax Rate

• Single/Unmarried Individuals: $250,525 to $626,350
• Heads of Households: from $250,500 to $626,350
• Married Individuals Filing Jointly: from $501,050 to $751,600
• Estates and Trust: from $11,450 to $15,650

37% Income Tax Rate

• Single/Unmarried Individuals: over $626,350
• Heads of Households: over $626,350
• Married Individuals Filing Jointly: over $751,600
• Estates and Trust: over $15,650

Gains Brackets

The tax year 2025 adjustments described below generally apply to taxable income from Long-term Capital Gains and Qualified Dividends:

0% Capital Gains Tax Rate

• Single/Unmarried Individuals: $0 to $48,350
• Heads of Households: $0 to $59,750
• Married Individuals Filing Jointly: $0 to $96,700
• Estates and Trust: $0 to $3,250

15% Capital Gains Tax Rate

• Single/Unmarried Individuals: $48,350 to $533,400
• Heads of Households: $59,750 to $523,050
• Married Individuals Filing Jointly: $96,700 to $600,050
• Estates and Trust: $3,150 to $15,900

20% Capital Gains Tax Rate

• Single/Unmarried Individuals: over $533,400
• Heads of Households: over $523,050
• Married Individuals Filing Jointly: over $600,050
• Estates and Trust: over $15,900

We Speak Tax (So You Don't Have To)

Now that your 2025 tax brackets are known, what is your strategy to make the most of these brackets (in 2025 and beyond)? 

We can help you seek an optimal approach each year.

At a minimum, if you've never had someone walk through your past tax returns and explain where the amounts came from and how your total tax is calculated, ask us to do so today.

Call us at (775) 827-0670 or schedule a Quick Connection time with us at www.openwindowFS.com/connection.