Your tax bill is largely determined by tax brackets. These are really just ranges of taxable income. As your taxable income moves up this ladder, each layer gets taxed at progressively higher rates.

How do tax brackets work?

A single person with $140,000 in taxable income in 2024 would be in the 24% tax bracket. This doesn’t mean all of their income is taxed at that rate. Their effective tax rate would be much lower than that top rate.