How federal income tax is calculated
Federal income tax is charged on taxable income, not on your salary. The calculator follows the same order as Form 1040:
- Start with total income (wages plus other taxable income).
- Subtract pre-tax payroll deductions and adjustments to reach adjusted gross income (AGI).
- Subtract the standard deduction for your filing status, plus any of the 2025–2028 deductions you qualify for (senior, qualified overtime, qualified tips), to reach taxable income.
- Apply the brackets progressively: each rate applies only to the slice of income inside its bracket.
- Subtract nonrefundable credits — here, the Child Tax Credit — but not below zero.
2026 federal tax brackets
The brackets below are read from our federal dataset, sourced from the IRS (see the methodology page). Each figure is the lower edge of taxable income for that rate.
| Rate | Single | Married filing jointly | Married filing separately | Head of household |
|---|---|---|---|---|
| 10% | over $0 | over $0 | over $0 | over $0 |
| 12% | over $12,400 | over $24,800 | over $12,400 | over $17,700 |
| 22% | over $50,400 | over $100,800 | over $50,400 | over $67,450 |
| 24% | over $105,700 | over $211,400 | over $105,700 | over $105,700 |
| 32% | over $201,775 | over $403,550 | over $201,775 | over $201,750 |
| 35% | over $256,225 | over $512,450 | over $256,225 | over $256,200 |
| 37% | over $640,600 | over $768,700 | over $384,350 | over $640,600 |
Standard deduction
| Single | Married filing jointly | Married filing separately | Head of household |
|---|---|---|---|
| $16,100 | $32,200 | $16,100 | $24,150 |
Taxpayers 65 or older add $2,050 (unmarried) or $1,650 per qualifying spouse (married). Blindness also qualifies; this calculator only asks about age.
Worked example: $65,000, single
The default result above, step by step:
| Bracket | Income taxed in it | Tax |
|---|---|---|
| 10% | $12,400 | $1,240.00 |
| 12% | $36,500 | $4,380.00 |
| Total | $48,900 | $5,620.00 |
Income of $65,000 minus the $16,100 standard deduction leaves $48,900 of taxable income. The tax of $5,620 is 8.6% of total income — the effective rate — while the marginal rate on the next dollar is 12%.
For comparison, a married couple filing jointly with $120,000 of wages and two qualifying children has taxable income of $87,800, tax before credits of $10,040, a Child Tax Credit of $4,400 applied against it, and a final federal income tax of $5,640.
The 2025–2028 deductions: overtime, tips and seniors
The 2025 tax law (often called the One Big Beautiful Bill Act) added three temporary deductions for tax years 2025 through 2028. You can take them whether or not you itemize. They reduce federal income tax only — not Social Security, Medicare or most state taxes.
| Deduction | Maximum | Phase-out starts (single / joint) |
|---|---|---|
| Qualified overtime premium | $12,500 single / $25,000 joint | $150,000 / $300,000, reduced by 10% of income above |
| Qualified tips | $25,000 per return | $150,000 / $300,000, reduced by 10% of income above |
| Senior deduction (age 65+) | $6,000 per eligible person | $75,000 / $150,000, reduced by 6% of income above |
“Qualified overtime” means only the premium portion of overtime the Fair Labor Standards Act requires — the extra half in time-and-a-half — not your whole overtime pay. Married couples must file jointly to claim any of the three. Where our dataset gives a phase-out rate, the calculator applies it linearly to your AGI (the IRS may define modified AGI slightly differently); where it doesn’t, the deduction is left out once income passes the phase-out start, so the estimate errs on the side of more tax, not less.
Child Tax Credit
Each qualifying child under 17 is worth up to $2,200, reduced by $50 for each $1,000 (or part of $1,000) of income above $200,000 ($400,000 for joint filers). The credit first reduces your tax to zero; up to $1,700 per child of any leftover can be refunded as the Additional Child Tax Credit, which depends on your earned income and is figured when you file. The calculator applies the nonrefundable part and tells you how much may be refundable.
Marginal vs effective rate
Your marginal rate decides how much of an extra dollar — a raise, overtime or a bonus — you keep. Your effective rate tells you what share of your whole income goes to federal income tax. Use the marginal rate for decisions at the edge (should I contribute more to a traditional 401(k)?), and the effective rate for budgeting. For your combined rate including FICA and state tax, use the paycheck calculator.
This is an estimate from the standard deduction and the credits listed. If you have significant investment income, self-employment income or itemized deductions, a tax professional or IRS Free File software will give the exact figure.