Income Tax Calculator

The US federal income tax is a progressive marginal system: income is divided into brackets, and each bracket is taxed at its own rate. A common misconception is that getting a raise and "moving into a higher bracket" reduces your take-home pay—this is false. Only the portion of income that falls in a higher bracket is taxed at the higher rate; the lower brackets stay at their original rates.

Brackets, deductions, and taxable income

Your Adjusted Gross Income (AGI) equals gross income minus above-the-line deductions (like 401(k) contributions, HSA contributions, student loan interest, and educator expenses). Your taxable income equals AGI minus either the standard deduction or your itemized deductions—whichever is larger. The 2024 standard deduction is $14,600 for single filers, $21,900 for head of household, and $29,200 for married filing jointly. After the 2017 Tax Cuts and Jobs Act raised the standard deduction and capped the state and local tax (SALT) deduction at $10,000, roughly 90% of taxpayers now take the standard deduction.

How a marginal calculation actually works

Consider a single filer with $85,000 of taxable income in 2024. The calculation is not $85,000 × 22% = $18,700. Instead, it's layered:

• First $11,600 taxed at 10% = $1,160
• $11,601 to $47,150 (=$35,550) taxed at 12% = $4,266
• $47,151 to $85,000 (=$37,850) taxed at 22% = $8,327

Total federal tax: $1,160 + $4,266 + $8,327 = $13,753. The marginal rate is 22% (the rate on the last dollar earned), but the effective rate is $13,753 ÷ $85,000 = 16.2%. Effective rate is what you actually pay; marginal rate is what you'd pay on additional income—and what matters for decisions like whether to convert a Traditional IRA to a Roth.

Deductions vs. credits: a critical distinction

A deduction reduces taxable income, saving you taxes equal to the deduction times your marginal rate. A $1,000 deduction at the 22% bracket saves $220. A credit reduces tax owed dollar-for-dollar—a $1,000 credit saves $1,000, regardless of bracket. Credits are far more valuable. Major credits include the Child Tax Credit (up to $2,000 per qualifying child), the Earned Income Tax Credit (for low-to-moderate income workers), the American Opportunity and Lifetime Learning education credits, and clean-energy credits (solar, EV). This calculator excludes credits because they depend on many factors not captured by income alone.

What's not in this calculator

This tool computes federal income tax only. It does not include FICA taxes (Social Security 6.2% on wages up to $168,600 in 2024, plus Medicare 1.45% on all wages, with an additional 0.9% for high earners), state and local income taxes (which range from zero in states like Texas and Florida to 13.3% top rate in California), or the 3.8% Net Investment Income Tax on investment income above $200,000 (single) or $250,000 (MFJ). Self-employed individuals also owe the employer half of FICA via self-employment tax. For a complete picture, add these separately or use a comprehensive tax estimator.

Strategies to legally reduce federal tax

Maximize pre-tax retirement contributions (401(k), Traditional IRA, HSA), harvest investment losses to offset gains, bunch itemized deductions into alternate years to exceed the standard deduction threshold, and use tax-advantaged accounts like 529 plans for education savings. Charitable giving through a donor-advised fund can accelerate deductions. Backdoor Roth and mega-backdoor Roth strategies help high earners access Roth benefits. Always verify eligibility and consult a qualified CPA or tax advisor for personalized planning.