Q:

What is the federal tax rate?

A:

Quick Answer

The federal tax rate is the percentage at which taxes are paid on income. In the United States, the tax rate varies between tax brackets, or ranges of income amounts. Those in higher tax brackets, who make more money during the year, generally pay a higher percentage of taxes.

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Full Answer

Tax rate schedules are usually adjusted slightly each year, but there are usually seven brackets taxpayers may fall into. An individual who falls into the highest bracket does not pay the higher tax rate on all his income, only on the portion that falls into the income range represented by the bracket. Other income made by the same individual is taxed according to where it falls in the tax schedule.

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