Your marginal tax bracket determines how much of the earnings from savings and investments you get to keep after taxes. Below are the four individual tax rate schedules for 2022:
| Filing Status | Taxable Income ($) | Marginal Tax Bracket Rate (%) |
|---|---|---|
| Married Filing Jointly | 0 to 20,500 | 10 |
| 20,501 to 83,550 | 12 | |
| 83,551 to 178,150 | 22 | |
| 178,151 to 340,100 | 24 | |
| 340,101 to 431,900 | 32 | |
| 431,901 to 647,850 | 35 | |
| 647,851 and higher | 37 | |
| Head of Household | 0 to 14,650 | 10 |
| 14,651 to 55,900 | 12 | |
| 55,901 to 89,050 | 22 | |
| 89,051 to 170,050 | 24 | |
| 170,051 to 215,950 | 32 | |
| 215,951 to 539,900 | 35 | |
| 539,901 and higher | 37 | |
| Single | 0 to 10,275 | 10 |
| 10,276 to 41,775 | 12 | |
| 41,776 to 89,075 | 22 | |
| 89,076 to 170,050 | 24 | |
| 170,051 to 215,950 | 32 | |
| 215,951 to 323,925 | 35 | |
| 323,926 and higher | 37 | |
| Married Filing Separately | 0 to 10,275 | 10 |
| 10,276 to 41,775 | 12 | |
| 41,776 to 89,075 | 22 | |
| 89,076 to 170,050 | 24 | |
| 170,051 to 215,950 | 32 | |
| 215,951 to 323,925 | 35 | |
| 323,926 and higher | 37 |
You can compare yields by using the following formula:
Taxable equivalent yield = tax-free yield ÷ (100% - marginal tax bracket %) or see www.calcxml.com/calculators/inc11?skn, which includes both federal and state income tax rates.
Example: Assume you are in the 22% tax bracket, and have an account with a 4.0% tax-free yield. To get the equivalent taxable yield, divide 4.0% by 78% (100% - 22%). The taxable yield is 5.13%.