The chart below details some of the various factors that can impact a taxpayer’s marginal tax rate, including both ordinary income tax brackets and the Alternative Minimum Tax (AMT), the tax treatment of long-term capital gains and qualified dividends, the payroll taxes that apply to earned income for wage employees and the self-employed, the new 0.9% (on earned income) and 3.8% (on net investment income) Medicare surtaxes, the benefits of the pass-through business deduction on qualified business income, and the impact of various phaseouts including the QBI deduction and the AMT exemption phaseout.
This chart was originally produced for the November/December 2012 issue of The Kitces Report newsletter for subscribers, and has been updated for 2025.
