How U.S. federal income tax is calculated
The United States uses a progressive federal income tax. The IRS federal income tax rates and brackets page explains the seven rates from 10% to 37%. The IRS 2026 inflation adjustments confirm that those rates still apply for tax year 2026, with inflation-adjusted thresholds. This calculator starts from approximate single-filer brackets you can edit.
Taxable income is what remains after deductions. Many filers take the standard deduction published in the same IRS inflation notice. Self-employed people also need IRS self-employment tax page and may report business profit on IRS Schedule C (Form 1040). Always confirm current tables with the IRS or a licensed CPA before you file.
Effective rate, marginal rate, and estimated payments
Your marginal rate is the rate on the last dollar of taxable income. Your effective rate is total federal income tax divided by taxable income. The first dollars are still taxed at the lower brackets, which is why the two rates differ.
If you have income that is not fully withheld, the IRS expects IRS estimated tax guidance during the year. An estimate from this tool can help you set aside cash. It does not include state tax, local tax, or every credit, so treat it as a federal planning figure only.
How to use this U.S. federal tax calculator
Enter gross income, keep or change the standard deduction, then add extra deductions if they apply. Review the bracket-by-bracket breakdown and export Excel if you want a paper trail for your adviser.
For business owners, pair this estimate with a proper income statement. The IRS Publication 334, Tax Guide for Small Business is the official small-business tax guide and is the right next reading after you have a first number.