Marginal Tax Rate
taxAlso known as: marginal rate, top bracket
Updated · Written and reviewed by Konstantin Iakovlev
Detailed explanation
Marginal rate is what most people mean when they say "I'm in the 22% bracket" — it's the rate your next $1 of income would be taxed at. It's ALWAYS higher than your effective rate (total tax ÷ total income) because the lower portions of income are taxed at lower bracket rates. For example, a single filer with $100,000 taxable income in 2026 has a 22% marginal rate but only ~17% effective rate. Marginal rate matters most for decision-making: should you take overtime? Convert traditional to Roth? Sell stocks at LTCG vs ordinary rates? — all hinge on marginal rate.
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Related tax terms
Adjusted Gross Income (AGI)
Adjusted Gross Income (AGI) is your total gross income minus specific "above-the-line" deductions like contributions to ...
Modified Adjusted Gross Income (MAGI)
Modified Adjusted Gross Income (MAGI) is your AGI plus certain deductions added back, used to determine eligibility for ...
Standard Deduction
The standard deduction is a fixed dollar amount that reduces your taxable income. For 2026, it's $16,100 single, $32,200...
Effective Tax Rate
Your effective tax rate is your total tax liability divided by your total income — the blended average across all tax br...
Capital Gains
Capital gains are profits from selling investments held more than a moment. Long-term gains (held >1 year) get preferent...
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