Research

The Federal Revenue and Spending Report 2026: Where the Money Comes From and Goes

The Ledgerism Editorial Team
By The Ledgerism Editorial Team · The Ledgerism Brief Editorial Team produces original, methodology-disclosed accounting and tax research—data trackers, databases, and reference guides built to be the most-cited source in the field. Every figure is verified against primary sources including FASB, the IRS, the PCAOB, NASBA, the AICPA, and state boards of accountancy.
Published Jul 2, 2026
The Federal Revenue and Spending Report 2026: Where the Money Comes From and Goes

A data profile of United States federal government finances for fiscal year 2025, the most recent complete fiscal year (October 1, 2024 through September 30, 2025). All figures are actual, reported results from the U.S. Department of the Treasury and the Congressional Budget Office, not projections. Every figure is labeled with its fiscal year and source.

A note on fiscal-year labeling: The federal fiscal year runs October 1 to September 30. FY2025 ended September 30, 2025. Figures described here as “FY2025” are final full-year actuals from the Final Monthly Treasury Statement for September 2025 and the CBO summary published November 2025.

Executive summary

Key findings

  1. Total FY2025 federal receipts were $5,234.6 billion, an increase of 6.4 percent over FY2024 (U.S. Treasury, Final Monthly Treasury Statement, September 2025).
  2. Total FY2025 federal outlays were $7,010.0 billion, an increase of 4.1 percent over FY2024 (U.S. Treasury, September 2025).
  3. The FY2025 deficit was $1,775.4 billion, about 5.9 percent of GDP, down from 6.3 percent of GDP in FY2024 (CBO, November 2025).
  4. Individual income taxes totaled $2,656.0 billion in FY2025, up 9.5 percent ($230.0 billion) year over year (U.S. Treasury, September 2025).
  5. Social insurance and retirement (payroll) taxes totaled $1,748.3 billion in FY2025, up 2.3 percent ($39.4 billion) (U.S. Treasury, September 2025).
  6. Corporation income taxes totaled $452.1 billion in FY2025, down 14.7 percent ($77.8 billion), or about $453 billion down from $530 billion per CBO (U.S. Treasury, September 2025; CBO, November 2025).
  7. Excise taxes totaled $105.9 billion in FY2025, up 4.4 percent ($4.5 billion) (U.S. Treasury, September 2025).
  8. “Other” receipts (estate and gift taxes, customs duties, and miscellaneous) totaled $272.3 billion in FY2025, up 79.3 percent ($120.4 billion), driven by higher customs duties (U.S. Treasury, September 2025).
  9. Customs duties alone totaled about $195 billion in FY2025, roughly 142 percent above CBO’s baseline projection of $80 billion, reflecting new tariffs (CBO, November 2025).
  10. Social Security outlays were $1,580.7 billion in FY2025, up 8.2 percent ($119.8 billion), the single largest spending function (U.S. Treasury, September 2025).
  11. Health function outlays (including Medicaid and ACA subsidies) were $978.9 billion in FY2025, up 7.4 percent ($67.2 billion) (U.S. Treasury, September 2025).
  12. Medicare outlays were $996.7 billion in FY2025, up 14.0 percent ($122.6 billion) (U.S. Treasury, September 2025).
  13. Net interest outlays were $970.4 billion in FY2025, up 10.1 percent ($89.3 billion), the fastest-growing large category (U.S. Treasury, September 2025).
  14. National defense outlays were $916.6 billion in FY2025, up 4.9 percent ($42.6 billion) (U.S. Treasury, September 2025).
  15. Income security outlays were $701.6 billion in FY2025, up 4.5 percent ($30.5 billion) (U.S. Treasury, September 2025).
  16. Gross federal debt reached about $37.4 trillion at the close of FY2025, and total federal debt rose about $2.2 trillion during the year (GAO, Schedules of Federal Debt FY2025).

Section 1 — Total receipts by source (FY2025)

Federal revenue in FY2025 came overwhelmingly from taxes on individuals. Individual income taxes and payroll taxes together supplied 84.1 percent of all federal receipts. Corporate income taxes, once a far larger share of federal revenue, contributed 8.6 percent. The most notable change from FY2024 was the surge in the “Other” category, driven almost entirely by higher customs duties (tariff collections).

Two classification systems apply here. The Treasury Monthly Treasury Statement and Combined Statement group estate and gift taxes, customs duties, and miscellaneous receipts into a single “Other” line ($272.3 billion). The Congressional Budget Office reports customs duties separately (about $195 billion in FY2025). Both are correct; they differ only in presentation. The table below uses the Treasury classification and adds the CBO customs figure as a memo item.

Receipt source (FY2025) Amount ($ billions) Share of total receipts YoY change
Individual income taxes 2,656.0 50.7% +9.5%
Social insurance and retirement (payroll) taxes 1,748.3 33.4% +2.3%
Corporation income taxes 452.1 8.6% -14.7%
Excise taxes 105.9 2.0% +4.4%
Other (estate and gift, customs duties, misc.) 272.3 5.2% +79.3%
Total receipts 5,234.6 100.0% +6.4%
Memo: customs duties (CBO classification) ~195 ~3.7% ~+142% vs. baseline

Shares are calculated from Treasury dollar amounts; individual shares sum to 99.9 percent due to rounding.

Source: U.S. Department of the Treasury, Final Monthly Treasury Statement, September 2025; customs memo from CBO, Monthly Budget Review: Summary for FY2025, November 2025.

What the numbers mean. Payroll taxes fund Social Security and the Medicare Hospital Insurance trust fund and are largely automatic, moving with wages and employment; their 2.3 percent growth reflects steady labor income. Individual income tax growth of 9.5 percent outpaced wage growth, reflecting strong withholding and nonwithheld payments. The 14.7 percent drop in corporate receipts is the year’s standout reversal; CBO attributes it partly to a provision in 2025 tax legislation allowing larger deductions for certain business investments.

Section 2 — Total outlays by major category (FY2025)

Four categories dominate federal spending: Social Security, the two large health programs (Medicare and the Health function, which includes Medicaid), national defense, and net interest. In FY2025, net interest ($970.4 billion) rose to roughly the same magnitude as national defense ($916.6 billion) and approached Medicare ($996.7 billion), a structural shift with no recent precedent.

Outlay category (FY2025) Amount ($ billions) Share of total outlays YoY change
Social Security 1,580.7 22.5% +8.2%
Medicare 996.7 14.2% +14.0%
Health (incl. Medicaid, ACA subsidies) 978.9 14.0% +7.4%
Net interest 970.4 13.8% +10.1%
National defense 916.6 13.1% +4.9%
Income security 701.6 10.0% +4.5%
All other functions (net) ~865.1 ~12.3% n/a
Total outlays 7,010.0 100.0% +4.1%

“All other functions” is a residual (total outlays minus the six listed functions) and includes veterans benefits, education/training, transportation, agriculture, international affairs, justice, and general government, net of undistributed offsetting receipts. Shares are computed from Treasury dollar amounts.

Source: U.S. Department of the Treasury, Final Monthly Treasury Statement, September 2025.

What the numbers mean. The top six functions accounted for roughly 87.7 percent of all federal spending in FY2025. Medicare’s 14.0 percent jump and the Health function’s 7.4 percent rise reflect rising per-enrollee costs and, for Health, increased ACA marketplace enrollment. Education/training outlays were unusually low in FY2025 ($71.0 billion, down sharply) because prior-year figures were inflated by student-loan accounting entries that reversed; this is an accounting effect, not a program cut of that magnitude, and is flagged as a comparability caveat.

Section 3 — The deficit (FY2025)

The FY2025 deficit was $1,775.4 billion. Receipts of $5,234.6 billion covered about 74.7 percent of outlays of $7,010.0 billion; the remaining 25.3 percent was borrowed. Because receipts grew faster (6.4 percent) than outlays (4.1 percent), the deficit narrowed slightly in dollar terms and fell from 6.3 percent to about 5.9 percent of GDP (CBO, November 2025).

FY2025 bottom line Amount
Total receipts $5,234.6 billion
Total outlays $7,010.0 billion
Deficit $1,775.4 billion
Deficit as % of GDP ~5.9%
Receipts as % of GDP ~17.1%
Outlays as % of GDP ~23.1%

Source: U.S. Treasury, Final Monthly Treasury Statement, September 2025; CBO, Monthly Budget Review: Summary for FY2025, November 2025.

Section 4 — Gross federal debt (end of FY2025)

At the close of FY2025 (September 30, 2025), gross federal debt was about $37.4 trillion, composed of debt held by the public of about $30.1 trillion and intragovernmental holdings of about $7.3 trillion. Total federal debt rose about $2.2 trillion during FY2025, of which roughly $2.0 trillion was an increase in debt held by the public.

Debt component (end of FY2025) Amount
Debt held by the public ~$30.1 trillion (99.8% of GDP)
Intragovernmental holdings ~$7.3 trillion
Gross federal debt ~$37.4 trillion
Increase during FY2025 ~$2.2 trillion

Source: U.S. GAO, Financial Audit: Bureau of the Fiscal Service’s FY2025 and FY2024 Schedules of Federal Debt (GAO-26-107908); CBO, November 2025. Debt held by the public as a share of GDP rose from 97.4 percent (end FY2024) to 99.8 percent (end FY2025) per CBO.

Section 5 — Original synthesis (derived insights)

Insight 1 — The “Borrowed Dollar” ratio: 25.3 cents of every dollar spent in FY2025 was borrowed

Formula: Deficit / Total outlays = $1,775.4B / $7,010.0B = 0.2533.

Interpretation: For every $1.00 the federal government spent in FY2025, about 74.7 cents was covered by receipts and 25.3 cents was borrowed. Put differently, receipts financed roughly three of every four dollars of spending.

Inputs: U.S. Treasury, Final Monthly Treasury Statement, September 2025 (receipts, outlays, deficit).

Limitations: A single-year snapshot; the ratio moves with the business cycle and policy. It does not distinguish mandatory from discretionary spending.

Insight 2 — Net interest now costs more than national defense

Comparison: Net interest ($970.4B) exceeded national defense ($916.6B) by about $53.8 billion in FY2025, a gap of roughly 5.9 percent.

Interpretation: In FY2025, servicing the debt cost the federal government more than its entire national defense function. Net interest was also the fastest-growing of the six largest categories in percentage terms among the large fixed-cost items (+10.1 percent). This is the first fiscal year in recent history in which net interest clearly surpassed defense on the Treasury functional basis.

Inputs: U.S. Treasury, Final Monthly Treasury Statement, September 2025.

Limitations: “Net interest” nets out interest received by federal accounts; gross interest is higher. Defense here is the budget function, not total national-security spending across all agencies.

Insight 3 — Individual taxpayers carry 84 percent of the revenue load; corporations carry under 9 percent

Formula: (Individual income taxes + payroll taxes) / total receipts = ($2,656.0B + $1,748.3B) / $5,234.6B = 84.1 percent. Corporate share = $452.1B / $5,234.6B = 8.6 percent.

Interpretation: Taxes falling directly on individuals (income plus payroll) supplied 84.1 percent of FY2025 federal revenue, while corporate income taxes supplied 8.6 percent. The individual-to-corporate revenue ratio was about 9.7 to 1.

Inputs: U.S. Treasury, Final Monthly Treasury Statement, September 2025.

Limitations: Economic incidence differs from statutory collection; some corporate tax burden is ultimately borne by workers and shareholders. Payroll taxes are earmarked for social insurance trust funds.

Insight 4 — The tariff swing: “Other” receipts grew nearly 80 percent, the largest proportional revenue change

Formula: Year-over-year change in “Other” receipts = +79.3 percent (from ~$151.9B to $272.3B), with customs duties (~$195B per CBO) the main driver, about 142 percent above CBO’s pre-tariff baseline.

Interpretation: No other revenue source came close to this growth rate in FY2025. Customs duties, historically a rounding error in federal revenue, became a material line item, though at roughly 3.7 percent of total receipts they remain small relative to income and payroll taxes.

Inputs: U.S. Treasury, September 2025 (Other total); CBO, November 2025 (customs duties and baseline comparison).

Limitations: The tariff-driven increase reflects FY2025 policy and may not persist; customs duties are economically borne partly by domestic importers and consumers.

Section 6 — Charts to create

  1. FY2025 federal receipts by source (donut/pie). Data: the five receipt sources and shares. Source: U.S. Treasury, September 2025. Insight: individual income + payroll = 84 percent. Citation-worthy because it visualizes revenue concentration in one image.
  2. FY2025 outlays by function (horizontal bar, largest to smallest). Data: six functions plus residual. Source: U.S. Treasury, September 2025. Insight: net interest now sits among the top four. Highly quotable for the “interest > defense” story.
  3. The Borrowed Dollar (100-unit waffle chart). Data: 74.7 financed / 25.3 borrowed. Source: derived. Insight: makes the deficit tangible per dollar spent.
  4. Net interest vs. national defense, FY2022–FY2025 (line). Data: net interest ~$500B (FY2022) rising to $970.4B (FY2025), defense trend. Source: CBO/Treasury. Insight: the crossover point.
  5. Gross federal debt composition (stacked bar). Data: public $30.1T + intragovernmental $7.3T = $37.4T. Source: GAO FY2025. Insight: scale of borrowing and debt-to-GDP near 100 percent.

Methodology

Source selection. Priority was given to Tier-1 primary sources: the U.S. Treasury’s Final Monthly Treasury Statement (the official monthly record of receipts and outlays), the Treasury Combined Statement (the annual authoritative accounting), the Congressional Budget Office’s Monthly Budget Review: Summary for FY2025, and the GAO audit of the Bureau of the Fiscal Service’s Schedules of Federal Debt. The CBO Budget and Economic Outlook provided GDP-share context.

Fiscal year labeling. FY2025 = October 1, 2024 to September 30, 2025. All headline figures are final actuals, not projections.

Handling conflicting numbers. Two reconcilable differences arose. (1) Customs duties: the Treasury MTS groups them within “Other” ($272.3B) while CBO reports them separately (~$195B); both are shown. (2) Corporate income taxes: Treasury MTS reports $452.1B and CBO reports about $453B (from $530B); these are the same figure to rounding. Where an early aggregated search snippet gave a lower corporate figure ($298B) or different Medicare/Health values, those were discarded in favor of the Final MTS and CBO summary line items.

Derived figures. Shares and ratios were computed directly from Treasury dollar amounts and are labeled as derived. Rounding may cause shares to sum to slightly under or over 100 percent.

Exclusions. An exact single-line FY2025 Veterans function outlay could not be isolated cleanly from one primary source line and is therefore not stated as a precise figure; it is included within “All other functions.” Any figure that could not be tied to a Tier-1 source with a specific fiscal-year label was excluded.

Date of last update: 2026-06-29.

Source quality ranking

Tier 1 (primary government):
– U.S. Department of the Treasury, Bureau of the Fiscal Service, Final Monthly Treasury Statement, September 2025 (receipts, outlays, deficit, functions).
– U.S. Department of the Treasury, Combined Statement of Receipts, Outlays, and Balances, FY2025 (receipts by source, outlays by function).
– Congressional Budget Office, Monthly Budget Review: Summary for Fiscal Year 2025, November 2025 (deficit, revenue trends, customs duties, program growth, deficit-to-GDP).
– U.S. Government Accountability Office, Financial Audit: Bureau of the Fiscal Service’s FY2025 and FY2024 Schedules of Federal Debt, GAO-26-107908 (gross debt, public vs. intragovernmental).
– Congressional Budget Office, The Budget and Economic Outlook (GDP shares, debt-to-GDP).

Tier 2 / Tier 3: None relied upon for figures. Secondary trackers were used only to locate primary documents, not as data sources.

Excluded: Aggregated search-engine summaries and any secondary figure that conflicted with the Final MTS or CBO line items; a preliminary corporate-tax figure of $298B (inconsistent with both Treasury and CBO) was rejected.

Citation format (per major statistic)

Journalist-friendly additions

Most quotable statistics (all FY2025)

Data limitations

Downloadable dataset — recommended fields (for a CSV / Dataset schema)

fiscal_year, category_type (receipt/outlay/debt/summary), category_name, amount_usd_billions, share_of_total_pct, yoy_change_pct, classification_system (Treasury/CBO), source_name, source_url, source_date, notes

150-word press summary

In fiscal year 2025 (ended September 30, 2025), the U.S. federal government collected $5,234.6 billion in receipts and spent $7,010.0 billion, producing a deficit of $1,775.4 billion, about 5.9 percent of GDP. Individual income taxes ($2,656.0 billion) and payroll taxes ($1,748.3 billion) together supplied 84 percent of revenue, while corporate income taxes fell 15 percent to about $453 billion. On the spending side, Social Security ($1,580.7 billion) was the largest program, but the year’s structural story was net interest on the debt, which reached $970.4 billion and surpassed national defense ($916.6 billion) for the first time in recent history. Gross federal debt closed the year near $37.4 trillion, with debt held by the public approaching 100 percent of GDP. Figures are final actuals from the U.S. Treasury and the Congressional Budget Office.

5 suggested headlines

  1. For the First Time, Uncle Sam Paid More in Interest Than for Defense in FY2025
  2. Where Every Federal Dollar Went in 2025: A $7 Trillion Breakdown
  3. 25 Cents of Every Federal Dollar Spent in 2025 Was Borrowed
  4. Individuals Carry 84 Percent of the Federal Tax Load; Corporations Under 9
  5. The $37 Trillion Ledger: U.S. Federal Debt Nears 100 Percent of GDP

10 FAQs (answered with verified FY2025 statistics)

  1. How much did the federal government collect in FY2025? $5,234.6 billion in total receipts (U.S. Treasury, September 2025).
  2. How much did it spend? $7,010.0 billion in total outlays (U.S. Treasury, September 2025).
  3. What was the FY2025 deficit? $1,775.4 billion, about 5.9 percent of GDP (CBO, November 2025).
  4. What is the largest source of federal revenue? Individual income taxes, $2,656.0 billion, 50.7 percent of receipts (U.S. Treasury, September 2025).
  5. How much comes from payroll taxes? $1,748.3 billion, 33.4 percent of receipts (U.S. Treasury, September 2025).
  6. How much did corporations pay? $452.1 billion in corporate income taxes, 8.6 percent of receipts, down 14.7 percent (U.S. Treasury, September 2025).
  7. What is the biggest single spending program? Social Security, $1,580.7 billion, 22.5 percent of outlays (U.S. Treasury, September 2025).
  8. How much is spent on interest? Net interest was $970.4 billion in FY2025, up 10.1 percent (U.S. Treasury, September 2025).
  9. How large is the national debt? Gross federal debt was about $37.4 trillion at the end of FY2025 (GAO, FY2025).
  10. How much of spending is borrowed? About 25.3 percent; receipts covered roughly 74.7 percent of outlays in FY2025 (derived from U.S. Treasury, September 2025).

Sources

  1. U.S. Department of the Treasury, Bureau of the Fiscal Service. Final Monthly Treasury Statement of Receipts and Outlays of the United States Government, September 2025. https://fiscaldata.treasury.gov/static-data/published-reports/mts/MonthlyTreasuryStatement_202509.pdf
  2. U.S. Department of the Treasury, Bureau of the Fiscal Service. Monthly Treasury Statement (MTS) dataset. https://fiscaldata.treasury.gov/datasets/monthly-treasury-statement/
  3. U.S. Department of the Treasury, Bureau of the Fiscal Service. Combined Statement, FY2025 — Receipts by Source. https://www.fiscal.treasury.gov/files/reports-statements/combined-statement/cs2025/receipt.pdf
  4. U.S. Department of the Treasury, Bureau of the Fiscal Service. Combined Statement, FY2025 — Outlays by Function. https://www.fiscal.treasury.gov/files/reports-statements/combined-statement/cs2025/outlay.pdf
  5. Congressional Budget Office. Monthly Budget Review: Summary for Fiscal Year 2025 (November 2025). https://www.cbo.gov/publication/61307
  6. Congressional Budget Office. Monthly Budget Review: Summary for Fiscal Year 2025 (PDF). https://www.cbo.gov/system/files/2025-11/61307-MBR-FY25-final.pdf
  7. U.S. Government Accountability Office. Financial Audit: Bureau of the Fiscal Service’s FY2025 and FY2024 Schedules of Federal Debt (GAO-26-107908). https://www.gao.gov/products/gao-26-107908
  8. U.S. Department of the Treasury, Bureau of the Fiscal Service. Debt to the Penny dataset. https://fiscaldata.treasury.gov/datasets/debt-to-the-penny/
  9. Congressional Budget Office. The Budget and Economic Outlook: 2025 to 2035. https://www.cbo.gov/publication/61172
  10. U.S. Department of the Treasury, Bureau of the Fiscal Service. America’s Finance Guide — Government Revenue. https://fiscaldata.treasury.gov/americas-finance-guide/government-revenue/

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