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The marginal tax rate is based on a progressive tax system, where tax rates for an individual will increase as income rises. This method of taxation aims to fairly tax individuals based upon their earnings, with low income earners being taxed at a lower rate than higher income earners.

Tax Rate

Single Filer Income


Up to $8,925


$8,926 to $36,250


$36,251 to $87,850


$87,851 to $183,250


$183,251 to $398,350


$398,351 to $400,000


$400,001 or more


Under the United States’ progressive tax system, taxpayers are divided into different tax brackets based on their taxable income, from a low of 10% for those earning less than $8,925, to a high of 39.6% for those earning over $400,001, according to 2014 tax rates.

If Mary has $87,000 of taxable income in 2014, her marginal tax rate will be 25%, according to her tax bracket.  If she were to earn an additional $851 of taxable income, she would pass into the next bracket, and her marginal tax rate would increase to 28%.

Say it is close to the end of the tax year and Mary knows she will receive a $10,000 bonus.  This bonus will increase her marginal tax rate to 28%.  As a result, she will want to search for deductions to reduce her taxable income and increase her pre-tax contributions. Better yet, she could find a way to postpone the bonus until the first business day of the next year.

For the most up to date Tax Rates, visit the IRS or Your Local Tax Authority. 

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