How US federal income tax works
Federal income tax is progressive: your income is sliced into brackets, and each slice is taxed at its own rate. Only the dollars inside the top bracket pay the top rate — a raise never makes you worse off. Before brackets apply, the standard deduction shields a fixed amount of income entirely: $15,000 for single filers in 2025, $30,000 for married filing jointly, $22,500 for head of household. This calculator applies the 2025 brackets and standard deductions, then optionally adds a flat state tax for a rough total.
Marginal vs effective rate — the key distinction
Your marginal rate is the rate on your next dollar earned. Your effective rate — what you actually pay on average — is always lower, because the standard deduction and the lower brackets shelter much of your income. When someone says they are "in the 22% bracket," their effective rate is often closer to 12–15%.
What this estimate leaves out
- FICA payroll taxes — Social Security (6.2% on wages up to the 2025 wage base of $176,100) and Medicare (1.45%) come out of paychecks separately; see the Paycheck Calculator.
- Credits — child tax credit, education credits and others reduce tax dollar-for-dollar and can change the result significantly.
- Itemized deductions — if mortgage interest, state taxes and charitable gifts exceed the standard deduction, enter the excess as "extra deductions."
- Real state systems — most states have their own brackets and deductions; the flat-rate field here is a planning approximation.
Worked example
A single filer earns $80,000 in 2025. The $15,000 standard deduction leaves $65,000 taxable. The brackets tax it in slices: 10% on the first $11,925 ($1,192.50), 12% on the next $36,550 ($4,386), and 22% on the remaining $16,525 ($3,635.50) — total federal tax of $9,214. That's an effective rate of 11.5%, even though the marginal bracket is 22%.
How to use this calculator
- Enter your gross annual income (salary and wages before any tax).
- Choose your filing status — it sets both the standard deduction and the bracket widths.
- Add extra deductions only if you itemize beyond the standard deduction.
- Optionally enter a flat state tax rate for a rough combined picture.
- Read the bracket table below to see exactly which slices of your income are taxed at which rate.
Planning moves that actually lower the bill
Pre-tax contributions — 401(k), traditional IRA, HSA, FSA — reduce taxable income at your marginal rate, which is why they are so valuable. $1,000 contributed in the 22% bracket saves $220 of federal tax today. Tax credits are worth even more per dollar because they subtract from the tax itself rather than from taxable income.