Tax bracket
Each tax bracket encompasses a certain amount of income to be taxed at a set rate. The rates now run from 10% to 35%. You are said to be in the 25% bracket if your highest dollar of income falls in that bracket. Even if you’re in the 25% bracket, part of your income is taxed at the 10% rate and some at 15%. Some of your income—such as the amounts protected by your personal and any dependent exemptions and your standard or itemized deductions—is not taxed at all.