How Federal Income Tax Works
The US uses a progressive tax system — you don't pay one flat rate on all your income. Instead, each portion of your income that falls within a bracket is taxed at that bracket's rate. This is why your effective rate (total tax ÷ total income) is always lower than your marginal rate (the bracket your last dollar falls into).
Standard Deduction for 2026
Before calculating tax, the IRS subtracts a standard deduction from your gross income. For 2026, this is $16,100 for single filers, $32,200 for married filing jointly, and $24,150 for head of household — these figures adjust annually for inflation.
2026 Federal Income Tax Brackets by Filing Status
These are the 2026 brackets for taxable income (income after deductions), as published by the IRS in Revenue Procedure 2025-32. The 2026 amounts apply to tax returns you file in 2027, and the calculator above uses them.
| Rate | Single | Married filing jointly | Head of household |
|---|---|---|---|
| 10% | $0 – $12,400 | $0 – $24,800 | $0 – $17,700 |
| 12% | $12,401 – $50,400 | $24,801 – $100,800 | $17,701 – $67,450 |
| 22% | $50,401 – $105,700 | $100,801 – $211,400 | $67,451 – $105,700 |
| 24% | $105,701 – $201,775 | $211,401 – $403,550 | $105,701 – $201,750 |
| 32% | $201,776 – $256,225 | $403,551 – $512,450 | $201,751 – $256,200 |
| 35% | $256,226 – $640,600 | $512,451 – $768,700 | $256,201 – $640,600 |
| 37% | Over $640,600 | Over $768,700 | Over $640,600 |
The 2026 standard deduction is $16,100 for single filers and married people filing separately, $32,200 for married couples filing jointly, and $24,150 for heads of household, per the IRS announcement.
Worked Example: Single Filer Earning $85,000
Suppose a single filer has $85,000 of wages and takes the $16,100 standard deduction. Taxable income is $85,000 − $16,100 = $68,900. The tax is calculated one bracket at a time:
- 10% on the first $12,400 = $1,240
- 12% on the next $38,000 (from $12,400 to $50,400) = $4,560
- 22% on the remaining $18,500 (from $50,400 to $68,900) = $4,070
Total federal income tax is about $9,870. The marginal rate (the bracket the last dollar falls in) is 22%, but the effective rate is only about 11.6% of gross income ($9,870 ÷ $85,000). That gap is why moving into a higher bracket never reduces your take-home pay: only the dollars above each threshold are taxed at the higher rate.
Ways to Reduce Your Taxable Income
Common ways to lower the income the brackets apply to include contributing to a traditional 401(k) (the 2026 employee limit is $24,500, or $32,500 if you are 50 or older), contributing to a traditional IRA (up to $7,500 in 2026, with deductibility depending on your income and workplace plan), and using a health savings account if you have a qualifying high-deductible health plan. Itemizing only helps if your deductible expenses, such as mortgage interest, state and local taxes up to the legal cap, and charitable gifts, add up to more than your standard deduction. Credits, such as the child tax credit, reduce your tax bill dollar for dollar and are separate from deductions.
What This Calculator Does Not Include
This tool estimates federal income tax only. It does not include Social Security and Medicare payroll taxes, state or local income tax, the net investment income tax, self-employment tax, or the alternative minimum tax, and it does not apply tax credits other than what you enter. Capital gains and qualified dividends are taxed at separate rates. For a precise figure, use IRS guidance or consult a licensed tax professional. This page is for general information and is not tax advice.