Income Tax Calculator

The US federal income tax system is progressive — different portions of your income are taxed at increasing rates as your income rises. You do not pay your top marginal rate on all of your income. For example, a single filer earning $75,000 in 2026 pays 10% on the first $11,925 of taxable income, 12% on the next portion up to $48,475, and 22% only on the income above that threshold. Their effective tax rate — total federal tax divided by total income — is approximately 10.9%, even though their marginal rate is 22%. Each dollar of income is taxed at the rate for the bracket it falls in, not at the top rate for the whole income.

Your marginal tax rate is the rate applied to your last dollar of income, the highest bracket you reach based on your taxable income. Your effective tax rate is your total federal income tax divided by your total income — the actual average percentage of your income that goes to federal tax. The effective rate is always lower than the marginal rate in a progressive tax system. Your marginal rate matters when evaluating whether additional income (like a bonus, freelance project, or Roth conversion) is worth taking. Your effective rate tells you what you actually pay as a percentage of your earnings.

Take the standard deduction unless the total of your qualifying itemized expenses exceeds the standard deduction amount for your filing status. For 2026, those amounts are $15,850 for single filers and $31,700 for married filing jointly. Common itemized deductions include state and local taxes paid (SALT, capped at $40,400 in 2026), mortgage interest on homes up to $750,000 in debt, and charitable donations. Approximately 90% of US taxpayers take the standard deduction because it exceeds their combined itemized deductions.

No, bonuses are ordinary income and are taxed at the same marginal rate as your salary under the progressive federal tax bracket system. What confuses most people is the withholding method, not the actual tax rate. Employers often withhold 22% from bonus payments as a flat supplemental withholding rate. This withholding is just an estimate of your tax liability — when you file your annual return, your bonus is included in your total income and taxed at your actual marginal rate.

The Earned Income Tax Credit (EITC) is a refundable federal tax credit for working Americans with low to moderate income. For 2026, the maximum credit is $8,046 for workers with three or more qualifying children. The credit is refundable, meaning you receive it as a refund even if you owe no federal income tax. The IRS estimates that approximately one in five eligible taxpayers fails to claim the EITC. To check your eligibility, use the IRS EITC Assistant at irs.gov/eitc.

Self-employed workers and freelancers pay both federal income tax and self-employment tax, the combined employee and employer portions of Social Security and Medicare totaling 15.3% of net self-employment income. Half of the self-employment tax is deductible as an above-the-line deduction from gross income. Self-employed workers generally must make quarterly estimated tax payments using IRS Form 1040-ES to avoid underpayment penalties.