Income Tax Calculator

Income Tax Calculator: Estimate Your Federal Refund or Tax Owed

The income tax calculator estimates how much U.S. federal income tax you will owe - or how large a refund you can expect - for the 2025 or 2026 tax year. It takes your filing status, dependents, wages and other income, adjustments, deductions, and credits, then walks through the same steps the IRS uses: calculating your total income, subtracting deductions to find taxable income, applying the progressive tax brackets, adding any additional taxes, subtracting credits, and comparing the result to what you have already paid through withholding and estimated payments. The bottom line is your projected refund or balance due.

U.S. tax law is famously complex, and this calculator condenses the most important parts into a tool that anyone can use for planning. While it cannot capture every rare situation, it accurately handles the income, deductions, and credits that apply to the vast majority of taxpayers.

How U.S. Federal Income Tax Works

The United States uses a progressive tax system, which means income is divided into bands called tax brackets, and each band is taxed at a higher rate than the one below it. A common misconception is that moving into a higher bracket taxes all of your income at that higher rate - in reality, only the portion of income that falls within each bracket is taxed at that bracket's rate. The rate on your last dollar of income is your marginal tax rate, while the average rate across all your income is your effective tax rate, which is always lower.

The calculation follows a clear sequence: start with total income, subtract adjustments to get adjusted gross income (AGI), subtract the standard or itemized deduction to get taxable income, apply the tax brackets to find the tax, then subtract credits and compare to payments already made.

2025 and 2026 Federal Income Tax Brackets

There are seven federal tax rates: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. The income thresholds for each rate are adjusted annually for inflation and vary by filing status. The table below shows the 2026 brackets for single filers and married couples filing jointly.

Rate	Single (2026)	Married Filing Jointly (2026)
10%	$0 – $12,400	$0 – $24,800
12%	$12,400 – $50,400	$24,800 – $100,800
22%	$50,400 – $105,700	$100,800 – $211,400
24%	$105,700 – $201,775	$211,400 – $403,550
32%	$201,775 – $256,225	$403,550 – $512,450
35%	$256,225 – $640,600	$512,450 – $768,700
37%	$640,600+	$768,700+

Example: A single filer with $80,000 in wages takes the 2026 standard deduction of $16,100, leaving $63,900 of taxable income. The tax is 10% of the first $12,400 ($1,240) + 12% of the next $38,000 ($4,560) + 22% of the remaining $13,500 ($2,970) = $8,770. If $9,000 was withheld, the refund is $230.

The Standard Deduction

The standard deduction is a fixed amount that reduces your taxable income, available to taxpayers who do not itemize. For 2026 it is $16,100 for single filers and married filing separately, $32,200 for married filing jointly and qualifying widow(er)s, and $24,150 for heads of household. For 2025 the amounts are $15,750, $31,500, and $23,625 respectively. Taxpayers age 65 or older receive an additional standard deduction. Most taxpayers take the standard deduction because it exceeds their itemizable expenses.

Itemized Deductions

Instead of the standard deduction, you can itemize if your deductible expenses are larger. This calculator automatically uses whichever is greater. Common itemized deductions include:

• Mortgage interest: Interest paid on a home loan, within IRS limits on the loan balance.
• State and local taxes (SALT): State and local income (or sales) taxes plus property taxes, subject to an annual cap.
• Charitable donations: Gifts to qualified charities, subject to income-based limits.
• Medical expenses: Unreimbursed medical costs exceeding 7.5% of AGI.

Itemizing makes sense most often for homeowners with significant mortgage interest and property taxes, or for those with large charitable gifts or medical bills.

Adjustments to Income (Above-the-Line Deductions)

Some deductions reduce your income before AGI is calculated and can be claimed whether or not you itemize. These "above-the-line" adjustments include traditional IRA contributions, student loan interest, and - under recent law - certain deductible tips, overtime pay, and car loan interest. Because they lower your AGI, they can also help you qualify for other tax benefits that phase out at higher income levels.

Tax Credits

Credits are more valuable than deductions because they reduce your tax bill dollar-for-dollar, rather than just reducing taxable income. The most common credits include:

• Child Tax Credit: A credit for each qualifying child under 17, with a smaller credit for other dependents. It phases out at higher incomes.
• Child and Dependent Care Credit: A credit for a portion of the cost of care that lets you work.
• Education credits: The American Opportunity and Lifetime Learning credits for tuition and related expenses.
• Earned Income Tax Credit (EITC): A refundable credit for low-to-moderate-income workers.

Credits can be nonrefundable (they can reduce your tax to zero but no further) or refundable (they can produce a refund beyond what you paid in). The Child Tax Credit is partially refundable.

Capital Gains and Qualified Dividends

Long-term capital gains (on assets held more than a year) and qualified dividends are taxed at preferential rates of 0%, 15%, or 20%, depending on your taxable income - generally lower than ordinary income rates. Short-term capital gains (assets held a year or less) are taxed as ordinary income. The calculator applies the preferential rates to long-term gains and qualified dividends and stacks them on top of your ordinary income to determine the correct rate.

Marginal vs. Effective Tax Rate

Your marginal tax rate is the rate applied to your last dollar of income - the bracket you "top out" in. It matters for decisions like whether to make a deductible contribution or take on extra income. Your effective tax rate is your total tax divided by your total income, which is always lower than your marginal rate because of the progressive brackets and deductions. For the $80,000 single filer above, the marginal rate is 22% but the effective rate (tax of $8,770 on $80,000) is about 11%.

Additional Taxes

Beyond regular income tax, some taxpayers owe extra taxes that the calculator accounts for:

• Self-employment tax: Covers Social Security and Medicare for self-employed income, at 15.3% (half of which is deductible).
• Net Investment Income Tax (NIIT): An extra 3.8% on investment income for high earners above set thresholds.
• Additional Medicare Tax: An extra 0.9% on wages and self-employment income above a threshold.
• Alternative Minimum Tax (AMT): A parallel tax system that ensures high-income taxpayers with many deductions pay a minimum amount.

Federal vs. State Income Tax

This calculator estimates federal income tax. Most states also levy their own income tax, with rates and rules that vary widely - some states have no income tax at all, while others use brackets similar to the federal system. Your total tax burden is the sum of federal, state, and local income taxes, plus payroll taxes (Social Security and Medicare). When budgeting, remember to account for all of these, not just federal tax.

Tips to Reduce Your Income Tax

• Contribute to tax-advantaged accounts like a 401(k), traditional IRA, or HSA to lower your taxable income.
• Claim all credits you qualify for - they are far more valuable than deductions.
• Compare standard vs. itemized deductions each year and use whichever is larger.
• Harvest capital losses to offset gains and reduce taxable investment income.
• Hold investments longer than a year to qualify for lower long-term capital gains rates.
• Adjust your withholding so you neither owe a large balance nor give the government an interest-free loan through an oversized refund.

Frequently Asked Questions