How federal income tax is calculated
The tax is not a flat share of your pay. It is worked out in four steps, and the calculator follows them in order:
- Adjusted gross income (AGI): your total income minus pre-tax deductions and adjustments, such as 401(k) and HSA contributions.
- Taxable income: AGI minus the larger of your standard deduction or your itemized deductions, and minus the senior deduction if you qualify. The IRS describes a deduction as an amount you subtract from your income so you do not pay tax on it.
- Tax by bracket: each slice of taxable income is taxed at the rate of the bracket it falls in.
- Credits: a credit is subtracted from the tax you owe, dollar for dollar.
tax = sum of (income in each bracket × its rate) − credits
2026 federal income tax brackets
These are the 2026 tax rate tables from IRS Revenue Procedure 2025-32, section 4.01, applied to taxable income. A qualifying surviving spouse uses the married filing jointly brackets.
| Rate | Single | Married filing jointly | Married filing separately | Head of household |
|---|---|---|---|---|
| 10% | US$0 to US$12,400 | US$0 to US$24,800 | US$0 to US$12,400 | US$0 to US$17,700 |
| 12% | US$12,401 to US$50,400 | US$24,801 to US$100,800 | US$12,401 to US$50,400 | US$17,701 to US$67,450 |
| 22% | US$50,401 to US$105,700 | US$100,801 to US$211,400 | US$50,401 to US$105,700 | US$67,451 to US$105,700 |
| 24% | US$105,701 to US$201,775 | US$211,401 to US$403,550 | US$105,701 to US$201,775 | US$105,701 to US$201,750 |
| 32% | US$201,776 to US$256,225 | US$403,551 to US$512,450 | US$201,776 to US$256,225 | US$201,751 to US$256,200 |
| 35% | US$256,226 to US$640,600 | US$512,451 to US$768,700 | US$256,226 to US$384,350 | US$256,201 to US$640,600 |
| 37% | Over US$640,600 | Over US$768,700 | Over US$384,350 | Over US$640,600 |
Standard deduction, age and the senior deduction
Section 4.14 of the same revenue procedure sets the 2026 standard deduction: US$16,100 for single filers and married people filing separately, US$32,200 for married couples filing jointly and qualifying surviving spouses, and US$24,150 for heads of household. Each person who is 65 or older or blind adds US$1,650 per condition, raised to US$2,050 for someone who is unmarried and not a surviving spouse.
For tax years 2025 to 2028 there is also an enhanced deduction for seniors of up to US$6,000 per person 65 or older, which you can take whether you itemize or not. On Schedule 1-A, Part V, it shrinks by 6% of your modified adjusted gross income above US$75,000, or US$150,000 on a joint return, so it is gone at US$175,000 for a single filer. IRS Publication 554 adds that married people must file a joint return to claim it. The calculator uses your AGI as modified AGI, which is the same for most people.
Take a married couple filing jointly, both 65 or older, with US$120,000 of income. Their standard deduction is US$35,500 (US$32,200 plus two times US$1,650), their senior deduction US$12,000, so their taxable income is US$72,500 and the tax US$8,204.00, an effective rate of 6.8%.
Worked example
A single filer earns US$85,000 and puts US$5,000 into a 401(k). Their AGI is US$80,000. After the US$16,100 standard deduction, taxable income is US$63,900, and it is taxed like this:
| Rate | Income in the bracket | Tax |
|---|---|---|
| 10% | US$12,400 | US$1,240.00 |
| 12% | US$38,000 | US$4,560.00 |
| 22% | US$13,500 | US$2,970.00 |
The total is US$8,770.00. The marginal rate is 22%, but the effective rate on the US$85,000 of income is 10.3%, because only the top US$13,500 is taxed at 22%.
Marginal vs effective tax rate
Your marginal rate is the rate on the next dollar of taxable income. It tells you what a raise, a bonus or an extra deduction is worth: at a 22% marginal rate, US$1,000 more income adds about US$220 of federal income tax, and US$1,000 more in a 401(k) saves about US$220. Your effective rate is the total tax divided by your total income, the share of everything you earned that went to federal income tax. A raise that crosses into a higher bracket never lowers your take-home pay, because the higher rate only applies to the dollars above the line. The guide to the 2026 federal income tax brackets walks through this in more detail.
Standard or itemized deduction
IRS Topic 501 says to itemize on Schedule A when your allowable itemized deductions are larger than your standard deduction. They include state and local income or sales taxes, real estate taxes, mortgage interest, gifts to charity and medical expenses, each with its own limits. Pick Itemized and enter your total: the calculator uses the larger of the two and tells you how much the choice is worth. If you are married filing separately and your spouse itemizes, you have to itemize too. The standard deduction 2026 guide covers who cannot take it and the amounts for dependents.
What the calculator does not include
- State and local income tax. Use the paycheck calculator, which adds state tax, Social Security and Medicare for wages in every state.
- Long-term capital gains and qualified dividends. IRS Topic 409 explains that net capital gain can be taxed at 0%, 15% or 20% instead of the brackets above. Use the capital gains tax calculator for a sale.
- Self-employment tax. Freelancers also owe Social Security and Medicare on their profit; the self-employment tax calculator works it out line by line.
- Other items: the alternative minimum tax, the net investment income tax, the deductions for tips, overtime and car loan interest, the smaller standard deduction for someone claimed as a dependent, and refunds from refundable credits.
How to use the income tax calculator
- 1Pick your filing status and enter your total income for the year, plus what you put into a 401(k), HSA or other pre-tax accounts.
- 2Keep Standard, or choose Itemized and enter your itemized deductions. Tick the boxes for age 65 or older and blindness that apply, and enter any tax credits.
- 3Read your federal income tax, the tax in each bracket and your marginal and effective rate. Use Copy result or Copy link to keep it.
Tax year and sources
All amounts are for tax year 2026 and were checked in October 2026.
- IRS Revenue Procedure 2025-32 (PDF): section 4.01 tax rate tables, section 4.14 standard deduction and the additional amount for the aged or blind
- IRS Schedule 1-A (Form 1040), Part V: enhanced deduction for seniors and its phase-out (PDF)
- IRS: One, Big, Beautiful Bill Act tax deductions for working Americans and seniors
- IRS Publication 554: Tax guide for seniors (married people must file jointly for the senior deduction; no standard deduction when a spouse filing separately itemizes)
- IRS Topic 501: Should I itemize?
- IRS: Credits and deductions for individuals
- IRS Topic 409: Capital gains and losses
Frequently asked questions
What are the federal income tax brackets for 2026?
There are seven rates: 10%, 12%, 22%, 24%, 32%, 35% and 37%. For a single filer, 10% applies to the first US$12,400 of taxable income, 12% up to US$50,400, 22% up to US$105,700, and 37% starts above US$640,600. Joint filers have wider brackets, starting with 10% on the first US$24,800. The table on this page lists all filing statuses, from IRS Revenue Procedure 2025-32.
What is the difference between my marginal and effective tax rate?
Your marginal rate is the rate on your last dollar of taxable income, the bracket you are in. Your effective rate is your total tax divided by your income. Because each bracket only taxes the income inside it, the effective rate is always lower than the marginal rate. Moving into a higher bracket only raises the tax on the dollars above the threshold.
What is the standard deduction for 2026?
US$16,100 for single filers and married people filing separately, US$32,200 for married couples filing jointly and qualifying surviving spouses, and US$24,150 for heads of household. Each person who is 65 or older or blind adds US$1,650 per condition, or US$2,050 if unmarried and not a surviving spouse.
Is the senior deduction included?
Yes. For tax years 2025 to 2028, each person 65 or older can deduct up to US$6,000 more, whether or not they itemize. Schedule 1-A reduces it by 6% of modified adjusted gross income over US$75,000, or US$150,000 on a joint return. Married people must file jointly to claim it. The calculator applies it when you tick 65 or older.
Should I itemize or take the standard deduction?
IRS Topic 501 says to itemize if your allowable itemized deductions, such as state and local taxes, mortgage interest, charitable gifts and some medical costs, add up to more than your standard deduction. Choose Itemized and enter your total; the calculator uses whichever is larger and shows the difference. If you are married filing separately and your spouse itemizes, you cannot take the standard deduction.
How do tax credits change the result?
A deduction lowers the income that is taxed, while a credit is subtracted from the tax itself, dollar for dollar. Enter the total of your credits, such as the child tax credit, and the calculator subtracts it from the tax, down to zero. Refundable credits can pay out more than the tax you owe; that refund is not shown here.
Does this include state income tax?
No. It estimates US federal income tax for tax year 2026 only, with no state or local tax, Social Security or Medicare. The paycheck calculator adds state tax and payroll taxes for wages in every state.