Income Tax Calculator

Your marginal rate is the rate applied to your last dollar of income (your top tax bracket), while your effective rate is your total tax divided by your total income. Because the system is progressive, only the slice of income that lands inside a given bracket is taxed at that bracket's rate — not all of your income. So someone in a higher bracket still pays the lower rates on their earlier dollars. The result is that your effective rate is always lower than your marginal rate, often by a wide margin. Marginal rate matters for decisions about an extra dollar earned or deducted; effective rate reflects your overall burden. Bracket thresholds change each year, so check current IRS figures.

It depends on whether you expect your tax rate to be higher now or in retirement. Traditional contributions are deducted from your taxable income today, lowering your current tax bill, but withdrawals in retirement are taxed as ordinary income. Roth contributions are made with after-tax dollars now, but qualified withdrawals — including all growth — come out tax-free later. If you expect to be in a higher bracket in retirement, such as early in your career when income is low, Roth often wins. If you are in peak earning years with a high marginal rate today, the upfront deduction of a traditional account usually has the edge. Many people split contributions between both to hedge against uncertain future tax rates.

Itemize only when your total itemizable deductions add up to more than the standard deduction for your filing status. You take one or the other, not both, so the choice comes down to whichever produces the larger total. Common itemizable expenses include mortgage interest, state and local taxes (currently capped at $10,000), charitable donations, and unreimbursed medical expenses that exceed 7.5% of your adjusted gross income. Since the standard deduction was raised substantially, the large majority of taxpayers now find it the better option and skip itemizing. It still pays to tally your deductible expenses if you own a home, give generously, or had high medical bills. Standard deduction amounts change yearly, so confirm the current figure with the IRS.

Estimate your total expected tax for the year and divide by four, paying each installment by its deadline — generally mid-April, mid-June, mid-September, and mid-January of the following year. Quarterly estimates apply when you have income without enough withholding, such as self-employment, freelance, or investment income. To avoid an underpayment penalty, the IRS offers a safe harbor: pay at least 90% of your current-year tax, or 100% of last year's tax (110% if your prior-year adjusted gross income was above $150,000), whichever is smaller. Basing payments on last year's known total is often the simplest way to stay penalty-free. Because exact due dates can shift for weekends and holidays, confirm the current deadlines with the IRS.

No — this tool estimates federal income tax only. State income tax is separate and varies widely: several states, including Texas, Florida, and Nevada, levy no income tax at all, while others reach into the double digits at their top brackets. Some states use their own progressive brackets and others apply a single flat rate, so your combined federal-plus-state burden depends heavily on where you live. Payroll (FICA) taxes for Social Security and Medicare are also charged separately from income tax and are withheld on wages. For a complete picture of what leaves your paycheck, layer your state's rules and FICA on top of this federal estimate, and check your state revenue department for current rates.