Federal Tax Calculator

Your marginal tax rate is the percentage of tax applied to the highest dollar of your taxable income (e.g., if you are in the 22% tax bracket, your marginal rate is 22%). Your effective tax rate is the actual percentage of your total income paid in taxes. It is calculated by dividing your total tax liability by your gross income. Because the US uses a progressive tax system where income segments are taxed at progressively higher rates, your effective tax rate is always lower than your marginal tax rate.

Tax deductions and tax credits lower your taxes in different ways. A tax deduction reduces your taxable income. For example, if you are in the 22% tax bracket, a $1,000 deduction reduces your taxable income by $1,000, saving you $220 in taxes. A tax credit reduces your tax liability directly, on a dollar-for-dollar basis. A $1,000 tax credit saves you exactly $1,000 in taxes, making credits significantly more valuable than deductions.

The standard deduction is adjusted annually for inflation by the IRS. For the 2026 tax year, the estimated standard deductions are: $15,600 for Single filers, $31,200 for Married couples filing jointly, and $23,400 for Head of Household filers. Taking the standard deduction lowers your taxable income without requiring you to track personal expenses or itemize deductions on Schedule A.

In the US progressive tax system, your income is divided into segments, and each segment is taxed at its corresponding rate. For example, even if your total income puts you in the 24% tax bracket, you do not pay 24% on all your earnings. Your first segment of income is taxed at 10%, your next segment is taxed at 12%, and so on. Only the portion of your income that falls above the third bracket limit is taxed at the 22% and 24% rates.

Your filing status depends on your marital status and household situation on the last day of the tax year (December 31). If you are unmarried and have no dependents, you file as Single. If you are married, you can file as Married Filing Jointly (which offers the lowest tax rates and largest deductions) or Married Filing Separately. If you are unmarried and pay more than half the cost of keeping up a home for a qualifying dependent, you can file as Head of Household, which offers better rates than Single.

The W-4 form is the Employee's Withholding Certificate that you submit to your employer. It tells your company's payroll department how much federal income tax to withhold from each paycheck based on your filing status, dependents, and other income. If you withhold too much, you will receive a tax refund after filing your return. If you withhold too little, you may owe taxes and face underpayment penalties. You should update your W-4 after major life events, such as marriage or having a child.

FICA stands for the Federal Insurance Contributions Act. FICA taxes are separate payroll taxes withheld from your paycheck to fund Social Security and Medicare. For employees, the FICA tax rate is 7.65% (6.2% for Social Security up to the wage limit, and 1.45% for Medicare). Lenders and tax calculators keep FICA tax separate from federal income tax because FICA is a flat tax on earned wages, whereas income tax is a progressive tax on all taxable income.

The Child Tax Credit is a tax credit for families with qualifying dependent children under the age of 17. For 2026, the standard credit is up to $2,000 per child, a portion of which is refundable if your tax liability is zero. The credit begins to phase out for single filers with AGIs above $200,000 and married couples with AGIs above $400,000. It is a highly valuable credit that directly lowers a family's tax bill.

Tax avoidance is the use of legal methods to minimize the amount of income tax you owe. Examples include contributing to a 401(k), claiming standard deductions, or taking tax credits. Tax avoidance is fully legal and encouraged. Tax evasion is the illegal practice of not paying taxes, such as hiding income, inflating deductions, or falsifying transactions. Tax evasion is a federal crime that carries severe financial penalties and criminal prosecution.

The standard deadline to file federal income tax returns and pay any taxes owed is April 15 of each year. If April 15 falls on a weekend or a legal holiday, the deadline is extended to the next business day. You can request an automatic six-month filing extension to October 15 by submitting Form 4868, but this only extends the time to file your paperwork—it does not extend the time to pay any taxes you owe.