Federal tax return in the USA

21st Aug 2023

The U.S. federal income tax is a tax levied by the Internal Revenue Service (IRS) on the annual earnings of individuals, corporations, trusts, and other legal entities.

Federal income taxes apply to all forms of earnings that make up a taxpayer's taxable income, including wages, salaries, commissions, bonuses, tips, investment income, and certain types of unearned income.

In the U.S., federal income tax rates for individuals are progressive, meaning that as taxable income increases, so does the tax rate. Federal income tax rates range from 10% to 37%. Different tax rates are levied on income in different ranges (or brackets) depending on the taxpayer’s filing status. In 2022 the top tax rate (37 percent) applies to taxable income over $539,901 for single filers and over $647,851 for married couples filing jointly. The income ranges to which the rates apply are called tax brackets. Income that falls within each bracket is taxed at the corresponding rate.

How Federal Income Tax Works

Tax is collected from individuals and corporations by the city, state, or country where they reside or operate. When the collected tax is credited to the country's government, it is referred to as a federal tax. Governments use the money collected through federal taxes to pay for the growth and upkeeping of the country. Are you wondering what for exactly are these funds? For example - to build, repair, and maintain infrastructure, fund the pensions and benefits of government workers, fund major health programs, including Medicare, Medicaid, CHIP, and marketplace subsidies, fund "safety net" programs to assist lower-income households, fund defense and international security programs and to provide emergency disaster relief.

The 2023 Income Tax Brackets

The 2023 tax year will have the same seven federal tax brackets: 10%, 12%, 22%, 24%, 32%, 35% and 37%. Your filing status and taxable income, including wages, will determine the bracket you’re in.

How To Figure Out Your Tax Bracket? You can calculate your taxes by dividing your income into the portions that will be taxed in each applicable bracket. Every bracket has its own tax rate. The bracket you are in depends on your filing status: if you are a single filer, married filing jointly, married filing separately or head of household.

For example, if you are single and your 2022 taxable income is $75,000, your marginal tax bracket is 22%. However, some of your income will be taxed in lower tax brackets: 10% and 12%. As your income moves up the ladder, your taxes will increase:

  • the first $10,275 is taxed at 10%: $1,027.50,
  • the next $31,500 (41,775-10,275) is taxed at 12%: $3,780,
  • the last $33,225 (75,000-41,775) is taxed at 22% $7,309.50,
  • the total tax amount for your $75,000 income is the sum of $1,027.50 + $3,780 + $7,309.50 = $12,117 (ignoring any itemized or standard deductions that may apply to your taxes).


The federal income tax is the largest source of revenue for the U.S. government.

Federal income tax is used for various expenses ranging from building and repairing the country's infrastructure to improving education and public transportation and providing disaster relief.

Federal income taxes are based on your income and filing status and tax rates apply to everyone, regardless of where they live or work.

Get your taxes back