Financial Literacy
US Paycheck Tax & Deduction Guide
Understand where every dollar of your gross income goes—from federal tax brackets to FICA payroll deductions and state taxes.
1Federal Income Tax Brackets (2026)
The United States uses a progressive tax system. This means that higher income levels are taxed at higher rates, but only the portion of your income that falls within each specific bracket is taxed at that rate.
2026 standard deduction: $16,100 for single filers and $32,200 for married couples filing jointly.
| Tax Rate | Single Filer Bracket | Married Jointly Bracket |
|---|---|---|
| 10% | $0 – $12,400 | $0 – $24,800 |
| 12% | $12,400 – $50,400 | $24,800 – $100,800 |
| 22% | $50,400 – $105,700 | $100,800 – $211,400 |
| 24% | $105,700 – $201,775 | $211,400 – $403,550 |
| 32% | $201,775 – $256,225 | $403,550 – $512,450 |
| 35% | $256,225 – $640,600 | $512,450 – $768,700 |
| 37% | Over $640,600 | Over $768,700 |
2FICA Taxes: Social Security & Medicare
FICA stands for the Federal Insurance Contributions Act. FICA payroll taxes fund federal entitlement programs:
- Social Security (6.2%): Applied to earned income up to the annual cap of $184,500. Earnings above this cap are exempt.
- Medicare (1.45%): Applied to all earned wages without any income limit. Higher earners (over $200k) may be subject to an additional 0.9% Medicare surtax.
3State Income Taxes: Flat vs Graduated vs 0%
State income taxes vary dramatically across the US:
- 0% Income Tax States: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming levy no state income tax on personal earnings.
- Flat Tax States: States like Pennsylvania (3.07%), Illinois (4.95%), and Indiana (2.95%) tax all taxable income at a single fixed rate regardless of income tier.
- Graduated Tax States: States like California, New York, and Oregon apply progressive brackets similar to the federal system.