Taxes feel complicated because the system is complicated. But the basics? Actually pretty simple.
How Income Tax Works
You don't pay the same rate on all your income. We use "tax brackets"—different rates for different portions of your income.
2026 Tax Brackets (Single Filers)
| Income Range | Tax Rate |
|---|---|
| $0 - $12,400 | 10% |
| $12,401 - $50,400 | 12% |
| $50,401 - $105,700 | 22% |
| $105,701 - $201,775 | 24% |
| $201,776 - $256,225 | 32% |
| $256,226 - $640,600 | 35% |
| $640,601+ | 37% |
The Bracket Myth
Only the money IN that bracket gets taxed at that rate.
Example: You earn $50,000
- First $12,400 taxed at 10% = $1,240
- Next $37,600 taxed at 12% = $4,512
- Total tax: $5,752 (effective rate: ~11.5%)
A raise always means more money in your pocket.
Key Tax Terms
| Term | What It Means |
|---|---|
| Total earnings before anything | |
| Adjusted (AGI) | Gross minus certain deductions |
| Taxable income | What you actually pay taxes on |
| Reduces tax dollar-for-dollar (best) | |
| Reduces taxable income (still good) | |
| Tax taken from each paycheck | |
| Refund | You overpaid; getting it back |
| Owed | You underpaid; gotta pay the difference |
Deductions: Standard vs. Itemized
You get to reduce your taxable income. Two options:
(2026):
- Single: $16,100
- Married filing jointly: $32,200
Itemized Deductions:
- interest
- State/local taxes (capped at $10,000)
- Charitable donations
- Medical expenses (above 7.5% of income)
The W-4: Getting Withholding Right
Your W-4 tells your employer how much tax to withhold. Get it wrong and you'll either:
- Get a big refund (you gave the government an interest-free loan)
- Owe money (you might face penalties)
Filing Your Taxes
You have until April 15 to file (or file an extension).
Free filing options:
- IRS Free File (income under ~$79,000)
- Cash App Taxes (free for most situations)
- VITA (Volunteer Income Tax Assistance) at libraries