Learn how tax brackets actually work

Why the rich don't pay taxes like you do

The system behind the US income tax isn't as straightforward as it looks. You earn money. Taxes get taken out. Case closed … right? Not exactly. In this episode of "1440 Explores," we break down how the US tax system actually works, from confusing deductions and misunderstood tax brackets to why the wealthiest Americans often end up paying a very different tax than everyone else.

The highest 2024 federal income tax bracket covered income upward of $731,201 for married couples filing jointly

To understand what you would owe on short-term capital gains and to visualize the favorability of long-term tax rates, you need to know how your traditional income is taxed at the federal level. A breakdown explores the different brackets for 2024, separated by filing status.

See which age group pays the most in taxes each year

Americans between 45 and 55 pay nearly 30% of all income taxes, bearing the largest share of tax burden in the country. These taxpayers pay an average tax rate of around 17%.

See how the income taxes in the US compare to other countries

The US's highest marginal income tax rate is 37%. That rate is compared to other countries' both in a map and accompanying chart. Denmark has the highest rate at nearly 56%, while a handful of countries don't use marginal taxes at all. In the Middle East, many countries count on oil and gas to finance their governments.

Individual income taxes are the federal government's primary revenue source, see a tracker that breaks down where the rest of the budget comes from

The US government historically makes nearly half of its total revenue last year from individual income taxes. But the US makes also makes money from a variety of other sources, including Medicare taxes and corporate income taxes. However, the federal government has run a deficit since 2001—reaching a peak of $3.13T in 2020.

Learn how the US tax code works and why it's important

First published in 1926, the US Code is the official codification of federal statutes in the US. Title 26 of the US Code, for instance, lists all of the federal tax laws of the United States. A new edition is published every six years.

How income taxes evolved from a funding tool for war into a crucial revenue source for the federal government

Americans have long resisted income taxes. So, how did they become permanent? This overview explains how wartime funding needs, constitutional changes, and economic shifts gave rise to the modern tax system, from the Civil War to the payroll withholding rules we follow today.

Calculate how much of your tax dollars go to each federal program based on your income, filing status, and number of children

Learn how tax credits are applied to income taxes

Tax credits are directly subtracted from the amount of money taxpayers owe on their annual income. Unlike tax deductions, credits reduce the owed amount while deductions reduce how much income is taxable. There are different types of tax credits that are either fully or partially paid out.

What's your tax filing status? Find out with this video

There are five different filing statuses taxpayers fall under when they file income taxes: single, married and filing jointly, married and filing separately, head of household, and surviving spouse. Taxpayers' status is determined by whichever category they fit into on December 31st of the tax year they're filing for.

Read why some states are considering imposing a flat tax rate that isn't adjusted by income

Wisconsin was the first US state to impose a state income tax, close in time to when the federal income tax went into effect. Many states followed suit, but nine states to this day still don't levy wage-related taxes.

Watch a breakdown of tax breaks most Americans don't know about

Programs like healthcare savings accounts or flexible spending accounts are tax-free accounts that are designed to help lower healthcare costs. However, many Americans don't use them and don't understand how they work.

Capital gains taxes were first levied in the US in 1913

However, up until 1921, they were treated the same as ordinary income. Ever since then, rates have swung up and down.

Visualizing US state taxes in seven charts

Ever wondered how your state’s tax system compares to others? Here’s an overview of the US state tax system based on seven visualizations.

Warren Buffett paid a lower effective tax rate than his secretary

While wages and salaries are taxed progressively at rates up to 37%, long-term investments are taxed at lower rates: 0%, 15%, or 20%. For wealthy individuals like Buffett, whose income mainly comes from investments, this means paying a lower effective tax rate than someone earning a salary.

US immigrants pay billions of dollars in taxes each year

While immigrants who are authorized workers pay taxes just like anyone else, even unauthorized workers file tax returns. These unauthorized workers use individual taxpayer identification numbers.

A rising number of Social Security beneficiaries are taxed on their Social Security income

That’s because while Social Security benefits increase with wages and inflation, the income limits for taxing those benefits stay the same and don’t adjust over time.

Read more about how the IRS is organized

The Internal Revenue Service is led by a commissioner, who leads the IRS for a five-year term after being selected by the president of the United States. Under the commissioner, the IRS has multiple subdivisions that work on different tax groups, such as the Wage and Investment Division to handle individual wage earners.

What are tariffs and how do they work?

Tariffs are taxes on imported goods paid by importing companies but typically passed on to consumers. They vary by country and product and, despite recent spikes, have historically accounted for less than 2% of federal revenue. Explore more with these data visualizations from USAFacts.

Calculate whether or not you're in the American middle class

In 2022, roughly 52% of US adults lived in middle-income households. This income calculator can help you determine whether or not you're one of them. Specifically, the calculator lets you enter your household income, location, and more to see where you line up in Pew's government data.

Trusts offer ways to reduce the taxes beneficiaries pay on assets in one’s estate

People of different socioeconomic classes often decide to establish a trust to avoid certain taxes. When someone dies and leaves assets to beneficiaries in a will, those beneficiaries must pay specific taxes a trust's beneficiaries avoid. It all depends on the type of trust.

Explore an interactive chart that shows peoples' annual salaries by occupation

The median salary for full-time workers in the United States was roughly $49.5K in 2024. An interactive chart details how salaries differ by occupation.

A guide to gig-worker taxes and the new Venmo rule

Tax laws are catching up to modern freelancers. Starting with income made in 2024, gig workers will have to report the earnings they receive via apps like Venmo and PayPal differently. The main change: workers will have to detail all app earnings above $5,000 (previously, it was $20,000), and that’ll eventually drop to $600. This guide explains what that’ll mean and answers common questions about the new rule.

See every time the minimum wage has been raised

Unlike some other nations, the US minimum wage isn’t tied to inflation. So instead of it automatically rising alongside the cost of living, Congress has to vote to raise the minimum wage every time they think it’s necessary.

Compounding, explained

During conversations about personal finance, the term "compounding" gets thrown around—but not everyone understands how compound interest and compound returns work. Broadly speaking, compounding is what happens when you not only earn returns or interest on your original investment, but also on the accumulated returns or interest you receive over time. This article explains how both of these processes function, and what compounding could mean for your wallet.

Learn about the differences between traditional and Roth IRAs

Traditional IRAs allow tax-deductible contributions, but withdrawals in retirement are taxed as income. Roth IRAs use after-tax dollars, offering tax-free withdrawals later, but income limits may restrict eligibility. Choosing between the two depends on your financial situation today and your future tax outlook.

The price of gas is a composite made up of several different factors, with the federal gas tax making up less than 20% of what drivers pay at the pump.

US consumers collectively owe more than $1T to credit card companies—almost as much as they owe in auto loans.

US housing costs have risen by roughly 175% between 1991 and 2026—but a growing number of Gen Zers are becoming homeowners anyway. In 2025, 4% of homebuyers were Gen Z, up from 3% the year before.

Learn how to read a prospectus, the juicy document that any company must file with the SEC before going public.

While the first exchange-traded fund (a 'basket' of different assets that can be bought and sold on a stock exchange) in the US only launched in 1993, the global ETF market has grown to more than $10T in the short time since.

See how each of the more than two million known species relates to each other—and to common ancestors—in this zoomable tree of life.

Some coin denominations have ridges etched on their sides, partly to prevent counterfeiting, in a practice called 'reeding.'

Play the role of a student in a game where you try to navigate college and remain debt-free, selecting different income levels, high school experience, race, ethnicity, and more.

Dozens of S&P 500 stocks, including Coca-Cola and Walmart—known as the dividend aristocrats—have increased dividends every year for 25 years

How Amazon operates a 'flywheel' business model, a self-reinforcing cycle that drives continuous growth

About 2,000 US babies are born annually without some portion of their limbs, potentially leading to a lifetime of pricey prosthetics.

The US Constitution is widely regarded as the longest-standing written national constitution still in force—see how it has influenced rights worldwide.

View the ten deadliest tornadoes in US history.

Mark Twain spent decades feuding with the US Postal Service, convinced its costs and regulations were bureaucratic overreach.

Art theft is the third-largest source of criminal revenues worldwide, thanks in part to the subjective nature of valuing a work of art.

Up to a million Girl Scouts sell about 200 million cookie boxes every spring, generating $800 million, largely because refusing a child is frowned upon

See a ranking of the best (and worst) Federal Reserve Chairs since 1914 out of the 16 men and women who have held the office since.

20,000 letters to the advice columnist 'Dear Abby' provide insight into prevailing sex, religion, and LGBTQ fears, anxieties, and concerns from the 1950s onward.

Between 10 million and 50 million people in the US develop rashes from poison ivy, poison sumac, and poison oak each year.

Gerrymandering works through two techniques: cracking opposing voters across districts to dilute their power, and packing them into a few to waste their votes in lopsided majorities.

See how fireworks are made and learn how metals like magnesium and copper are responsible for different colors.

The syncytiotrophoblast is the outer layer of the placenta and the largest human cell, spanning an area about twice that of a king-sized bedsheet.

Hurricanes, which rely on air consistently spinning in the same direction, cannot cross the equator because air curves in opposite directions north and south of it.

Hear 50 years of iconic hip-hop samples, the genre's foundational looped tracks