🧾 Income Tax Calculator

How the US Federal Income Tax Works

The United States federal income tax uses a progressive bracket system — different portions of your income are taxed at different rates. A common misconception is that reaching a higher bracket means all of your income is taxed at that higher rate. In reality, only the income above each bracket's threshold is taxed at the higher rate. Your marginal rate is the rate applied to the last dollar you earn. Your effective rate — total tax divided by total income — is always lower, and is the more useful measure of your actual tax burden.

Standard Deduction vs. Itemizing

Before calculating tax, you reduce your gross income by deductions. The standard deduction (for 2024: $14,600 for single filers, $29,200 for married filing jointly) is the simplest option and the right choice for most taxpayers. Itemizing is only beneficial if your qualifying expenses — mortgage interest, charitable contributions, state and local taxes (up to $10,000), and medical expenses — exceed the standard deduction. The Tax Cuts and Jobs Act of 2017 significantly raised the standard deduction, meaning fewer people benefit from itemizing.

FICA Taxes: Social Security and Medicare

Separate from federal income tax, most wage earners also pay FICA taxes: 6.2% of wages up to $168,600 (2024 limit) for Social Security, and 1.45% of all wages for Medicare — plus an additional 0.9% Medicare surtax on wages above $200,000 for single filers. Employers match the 6.2% and 1.45% portions. Self-employed individuals pay the full 15.3% (self-employment tax) since they are both employer and employee, though half is deductible on Schedule 1.