Marginal Tax Rate
What is Marginal Tax Rate?
The tax rate paid on your next dollar of income.
Understanding Marginal Tax Rate
Your marginal rate is the rate of the highest bracket your income reaches. It matters for decisions such as how much a raise, bonus, or deduction is worth.
A deduction saves tax at your marginal rate: at a 22% marginal rate, a $1,000 deduction saves $220.