Income Tax Calculator

How this income tax calculator works

This is a 1040-style US federal income tax calculator for tax years 2025 and 2026. It adds up every type of income, subtracts your deductions, applies the correct progressive tax brackets for your filing status, taxes qualified dividends and long-term capital gains at the lower capital-gains rates, adds Social Security taxation and any Net Investment Income Tax, subtracts your credits, then compares the total with what you have already paid in — showing whether you get a refund or owe.

It reflects the One Big Beautiful Bill Act (OBBBA) changes that took effect in 2025: the larger standard deduction, the new above-the-line deductions for tips, overtime and car-loan interest, the $40,000 SALT cap, the $2,200 Child Tax Credit and the $6,000 senior deduction.

Use it as a quick tax refund calculator and IRS tax estimator: enter your wages and withholding to see your estimated refund or tax owed, your adjusted gross income (AGI) and effective tax rate, plus credits like the Earned Income Tax Credit (EITC) and Child Tax Credit. It works for employees, the self-employed and retirees with Social Security income. For a single payday rather than the whole year, use the paycheck calculator; if you work for yourself, the self-employment tax calculator breaks out the 15.3% SE tax.

How your federal tax is calculated — the formula

Federal tax isn't one single sum — it is built up in stages, in the same order the IRS Form 1040 follows. Here is exactly what this calculator does behind the scenes:

1. Total up your income. Wages, self-employment profit, interest, dividends, short- and long-term capital gains, the taxable slice of Social Security, rental and other income are added together into your gross income.
2. Remove adjustments to reach your AGI. A handful of “above-the-line” deductions come off first — half of your self-employment tax, IRA contributions, student-loan interest, and the new tips, overtime and car-loan write-offs — leaving your Adjusted Gross Income.
3. Take the larger deduction. From AGI you subtract whichever is bigger: the standard deduction, or your itemized total (state and property tax up to the SALT cap, mortgage interest and charitable gifts). What remains is your taxable income.
4. Run the brackets twice. Ordinary income flows through the progressive 10%–37% brackets. Qualified dividends and long-term gains are set aside and taxed separately at the lower 0%, 15% or 20% rates, stacked on top of your ordinary income.
5. Add the extra taxes. Self-employment tax (Social Security and Medicare on 92.35% of your business profit) is added, along with the Alternative Minimum Tax and the 3.8% Net Investment Income Tax wherever they apply.
6. Subtract credits, then your payments. Nonrefundable credits (Child Tax Credit, child-and-dependent care, education) trim the tax first; refundable ones — the Earned Income Tax Credit and the refundable part of the Child Tax Credit — can push it below zero. The total is then measured against the tax already withheld, and the gap is your refund or the balance you owe.

Worked example

A single filer for 2026 with $90,000 of wages and $9,000 already withheld takes the $16,100 standard deduction, leaving $73,900 of taxable income. Their tax is $1,240 + $4,560 + 22% × $23,500 = $10,970. After subtracting the $9,000 withheld, they owe about $1,970. Add a little dividend or long-term-gain income and the numbers shift slightly — try it above.

2025 vs 2026 — what changed

The brackets and standard deduction rise with inflation each year. The 2026 standard deduction is $16,100 (single) and $32,200 (married filing jointly), up from $15,750 and $31,500 in 2025, and every bracket threshold is a little higher — so the same income usually owes slightly less tax in 2026.

How to use it & key terms

Enter your income, filing status and any deductions or credits, choose the tax year, then press Calculate to see your federal tax, refund or amount owed, and your marginal and effective rates.

Withholding versus what you actually owe

The refund or balance this tool shows is not really a separate number — it is the gap between the tax you owe for the year and the tax already taken from your pay. Employers withhold a slice of every paycheck as an estimate of your eventual bill. Reach the end of the year having withheld more than your true tax and the excess comes back as a refund; withhold less and you owe the difference. Seen that way, a large refund is not a windfall so much as a sign you lent money to the government, interest-free, all year — and an unexpected bill is simply the mirror image.

That gap is something you can steer. The form your employer uses to set your withholding reflects your filing status, dependants and any second income, and life rarely stands still. Marrying, having a child, taking on a side job, or a household going from one salary to two can all push withholding out of step with reality. Updating the form after a big change keeps each paycheck closer to your real liability, so you are neither startled by a bill in spring nor handing over more than necessary every month. The aim is not the biggest possible refund but the smallest possible surprise in either direction.

Income that arrives with no tax withheld is the usual reason a return ends in a bill: freelance earnings, investment profits and interest have no employer trimming tax as they land. If a meaningful share of your income comes from those sources, the system generally expects you to pay as you go through the year rather than settle it all at once, and falling too far behind can add a charge on top. Setting money aside as that income arrives — or nudging up the tax withheld from a paycheck to cover it — keeps the final reckoning calm.

None of this changes the tax you owe; it changes the timing and the size of the swing at filing. Tax brackets, deductions and credits shift from year to year, so a figure that fit last year may not fit this one. Use the estimate here to see roughly where you will land, then treat it as a planning figure to confirm against current official guidance rather than a final assessment.