Income tax calculator: taxable income and federal tax estimator

How do you calculate income tax?

Federal income tax is worked out in a fixed order, and every calculator you will find is doing these six steps behind the scenes. Doing them by hand once is worth the ten minutes, because it shows you which numbers actually move your bill.

The step people skip is number four. Your salary is not what gets taxed. A single filer on $60,000 in 2026 has roughly $43,900 of taxable income once the $16,100 standard deduction comes off, which puts the top of their income in the 12% band rather than the 22% band their salary alone would suggest.

The other common mistake is treating self-employment tax as part of income tax. It is a separate 15.3% charge on business profit, calculated on Schedule SE and added at the end. Someone with 1099 income can owe self-employment tax even in a year when their income tax comes out at zero. The self-employment tax calculator handles that side on its own.

How is taxable income calculated?

Taxable income is adjusted gross income minus your deduction. Almost nine in ten filers take the standard deduction, because the One, Big, Beautiful Bill Act kept it at the high level set in 2017 and made it permanent. You itemize only when your mortgage interest, state and local taxes (capped at the SALT limit), charitable gifts and large medical costs add up to more than the standard figure.

Two things people forget to subtract. Filers who are 65 or older, or blind, get an extra standard deduction on top of the figures above, and it stacks if both apply. And the adjustments in step two come off before the deduction, so a $4,000 HSA contribution lowers taxable income even though you took the standard deduction. More on the intermediate figure in what adjusted gross income means and on the deduction itself in the standard deduction explained.

What are the federal income tax brackets?

Seven rates, and they are marginal. Each rate applies only to the slice of taxable income that falls inside its band, which is why moving into a higher bracket never leaves you with less money in hand. The 2025 columns set the return you file this year. The 2026 columns set what should be coming out of your paycheck now. Both come from IRS Revenue Procedure 2025-32.

Head of household and married filing separately use the same seven rates on different thresholds. The full tables for all four statuses, both years, are on the federal tax brackets page.

A worked example: $75,000 of salary in 2026

Take a single filer with $75,000 in W-2 wages, no other income and no adjustments. Gross income is $75,000, AGI is $75,000, and taxable income is $58,900 after the $16,100 standard deduction. Now apply the bands.

This filer is "in the 22% bracket" and pays 10.2% of gross salary in federal income tax. Whether they owe anything in April depends entirely on what their employer already sent in. If the W-2 shows $8,400 of federal withholding, they get $730 back. If it shows $6,900, they write a check for $770. Credits come off after this calculation, dollar for dollar, so a $2,000 child tax credit turns that $7,670 into $5,670.

How do you calculate tax on 1099 or self-employed income?

Two taxes, not one, and this is where most estimates go wrong. Self-employment tax is 15.3% (12.4% Social Security plus 2.9% Medicare) charged on 92.35% of your net profit, which is revenue minus business expenses. Income tax is then calculated on that same profit through the brackets above, after the standard deduction.

The Social Security portion stops once your combined wages and self-employment earnings pass the wage base, $176,100 for 2025 and $184,500 for 2026. The Medicare portion never stops, and an extra 0.9% applies above $200,000 for single filers. Half of the self-employment tax is deductible as an adjustment, which lowers your taxable income but not the self-employment tax itself.

That is why the standard advice is to set aside 25% to 30% of self-employed income. Nobody is withholding on your behalf, so you also owe the money in four quarterly estimated payments rather than once in April. TaxFile prepares the Schedule C and Schedule SE that produce these figures, and Schedule C filing covers the expense side.

Marginal rate or effective rate: which one is yours?

Both, and they answer different questions. Your marginal rate is the rate on your next dollar of income, and it is the one that matters for decisions: whether to take overtime, how much a traditional 401(k) contribution saves you, what a raise is worth after tax. Your effective rate is total tax divided by total income, and it is the one that describes what you actually paid.

The gap between them is large for most people. The $75,000 single filer above has a 22% marginal rate and a 10.2% effective rate. When someone says they are "in the 22% bracket", the second number is closer to their reality. A useful habit: use the marginal rate to price a decision, and the effective rate to sanity-check a return. If your effective rate jumped several points from last year without your income changing much, something on the return is worth a second look.

State tax sits on top of all of this and follows its own rules, its own brackets and its own deduction. Nine states charge no tax on wage income at all. See state tax filing for how the second return works.

Will you owe money or get a refund?

The calculation above gives you total tax for the year. What lands in April is that number minus everything already paid in: federal withholding from every W-2, any estimated payments you made, and refundable credits. The tax itself is rarely the surprise. The withholding is.

Three situations produce most unexpected bills. A second job, because each employer withholds as though its salary is your only income, so neither one withholds enough. A spouse starting work mid-year, for the same reason on a joint return. And 1099 income alongside a W-2, where nothing is withheld on the 1099 side at all.

If the number the calculator gives you is uncomfortable, you have two levers and both work better in August than in April. File a new Form W-4 with your employer to raise withholding for the rest of the year, or make an estimated payment directly to the IRS. Adjusting withholding is usually the cleaner fix, because it spreads the cost across remaining paychecks. The take home pay calculator shows what a W-4 change does to each check, and how to fill out a W-4 walks through the form.

When you are ready to turn the estimate into a filed return, upload the same W-2s and 1099s to file your taxes online and the numbers carry straight through.