Income Tax Calculator
Estimate your 2026 federal and state income tax, credits, and refund.
Details
Income
Gross pay before any deductions
Deductions
Household
Older children, relatives
Already paid
Box 2 of your W-2
Total income tax
$13,545
23.6% effective · 31.3% marginal
Effective rate
23.6%
Marginal rate
31.3%
Tax year 2026 · file by April 15, 2027 (extension to October 15, 2027; anything you owe is still due on April 15, 2027).
This estimates federal income tax from your income, filing status and deductions.
It gives both your marginal rate, which applies to your next dollar, and your effective rate, which is what you actually pay overall.
How income tax brackets work
US federal income tax is progressive, which means different slices of your income are taxed at different rates. It does not mean your whole income is taxed at one rate.
This is the single most misunderstood thing about tax. Moving into a higher bracket does not tax all your income at the higher rate. Only the amount above the threshold is taxed at that rate, so a raise never leaves you worse off.
Two rates follow from that. Your marginal rate is what applies to your next dollar earned. Your effective rate is total tax divided by total income, and it is always lower. Someone with a 22% marginal rate might have an effective rate of 16.9%.
The 22% marginal rate applies only to the top slice. Averaged across all the income, the actual rate paid is 16.9%.
What to enter
- Gross income
- Everything before deductions: wages, self-employment income, interest, dividends and capital gains.
- Filing status
- Single, married filing jointly, married filing separately, or head of household. It changes both the brackets and the standard deduction.
- Deductions
- The standard deduction, or itemised deductions if they come to more. This is subtracted before the brackets are applied.
- Credits
- Subtracted from the tax itself, not from income, which makes a credit worth considerably more than a deduction of the same size.
Terms that get mixed up
- Marginal rate
- The rate on your next dollar of income. What people mean by "my tax bracket".
- Effective rate
- Total tax divided by total income. Always lower than the marginal rate, and the honest measure of what you pay.
- Deduction
- Reduces taxable income. A $1,000 deduction at a 22% marginal rate saves $220.
- Credit
- Reduces tax directly. A $1,000 credit saves $1,000, whatever your rate. Worth far more than the same deduction.
- [Payroll tax](/financial/payroll-tax-calculator)
- Separate from income tax. Social Security and Medicare come out as well, at 7.65% of wages.
What this assumes
Federal tax only. State income tax is separate, and rates vary from nothing to over 10%.
Bracket thresholds and the standard deduction are indexed annually. Check current IRS figures for exact numbers.
How to calculate your income tax
Reduce income to taxable income, run it through the brackets one slice at a time, then subtract credits.
- income in each bracket
- Only the portion that falls inside that band
- credits
- Subtracted from the tax, not from income
Find your taxable income. Gross income minus the standard deduction, or minus itemised deductions if they are larger.
Fill each bracket in turn. The lowest rate applies to the first slice, the next rate to the next slice, and so on. Only the top slice sees your marginal rate.
Add the slices together. That total is your tax before credits.
Subtract credits, then find your effective rate. Divide the final tax by your total income. That percentage is what you actually paid.
See a worked example: the gap between marginal and effective
- Taxable income
- $100,000
- Brackets
- 10%, 12%, 22% (illustrative bands)
First $12,000 at 10% = $1,200.
Next $37,000 at 12% = $4,440.
Remaining $51,000 at 22% = $11,220.
Total: $16,860. The marginal rate is 22%, but the effective rate is 16.9%.
These bands are round numbers chosen to show the mechanism. Real thresholds change every year, so use current IRS figures for an actual return.
$16,860, a 16.9% effective rate
Frequently asked questions
No. This is the most persistent tax myth there is. Only the income above the threshold is taxed at the higher rate, so more income always means more take-home pay.
Earning one dollar into a 22% bracket means that dollar is taxed at 22%, leaving 78 cents. Everything below the threshold is taxed exactly as it was before.
Marginal is the rate on your next dollar. Effective is your total tax divided by your total income.
In the worked example the marginal rate is 22% and the effective rate is 16.9%. Use marginal to decide whether extra income or a deduction is worth it; use effective to understand what you actually pay.
Whichever is larger. The standard deduction is a flat amount requiring no records; itemising means listing mortgage interest, state and local taxes up to the cap, and charitable giving.
Since the standard deduction was roughly doubled in 2018, the large majority of filers take it. Itemising usually only wins with a substantial mortgage or significant charitable giving.
Almost always. A credit reduces your tax dollar for dollar. A deduction reduces taxable income, so it saves only your marginal rate.
A $1,000 credit saves $1,000. A $1,000 deduction at a 22% marginal rate saves $220. Refundable credits go further still and can pay out beyond your tax owed.
Because income tax is not the only deduction. Payroll tax takes another 7.65% for Social Security and Medicare, and most states take income tax as well.
Health insurance premiums and retirement contributions come out too. Between them, take-home is often 70-80% of gross.
No, this is federal only. State income tax is separate and varies enormously.
Nine states have no personal income tax on wages, while others run above 10% at the top. If you are comparing locations or job offers, the state figure often matters more than the federal one.
Problems people actually run into
Turning down income to stay out of a bracket
People decline overtime, a bonus or a raise believing the higher bracket will cost them. It cannot: only the amount above the threshold is taxed at the higher rate.
There are narrow exceptions involving benefit cliffs, where crossing an income threshold ends eligibility for a subsidy or credit outright. Those are about the benefit, not the tax brackets.
Quoting your marginal rate as what you pay
"I'm in the 22% bracket" describes your top slice, not your bill. The effective rate in the example is 16.9%, which is a third lower.
Both numbers are useful for different jobs. Marginal answers "what would this extra dollar cost me"; effective answers "what share of my income goes to tax".
Results are estimates for general information only and are not professional financial, medical, or legal advice. Read our full disclaimer.
Sources
- Federal income tax rates and brackets · Internal Revenue Service
Last updated: September 4, 2026