Single
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Head of Household
Estimated Federal Income Tax
$0.00
Understanding Federal Income Tax Calculation
Federal income tax in the United States is calculated based on a progressive tax system, meaning higher income levels are taxed at higher rates. The calculation involves several steps: determining your Adjusted Gross Income (AGI), subtracting your deductions to arrive at your taxable income, and then applying the appropriate tax brackets for your filing status.
Key Concepts:
Gross Income: This is all the income you receive from all sources, including wages, salaries, tips, investment income, and business profits, before any deductions or adjustments.
Adjusted Gross Income (AGI): This is calculated by subtracting certain "above-the-line" deductions from your gross income. These can include contributions to traditional IRAs, student loan interest, and health savings account deductions. For simplicity in this calculator, we are directly using Gross Income as the base before other deductions.
Deductions: These are amounts subtracted from your AGI to reduce your taxable income. You can choose between the standard deduction (a fixed amount based on filing status) or itemized deductions (specific expenses like mortgage interest, state and local taxes up to a limit, and charitable contributions).
Taxable Income: This is the portion of your income that is actually subject to tax. It's calculated as AGI minus your deductions (either standard or itemized).
Tax Brackets: The U.S. has a marginal tax system. Income is divided into different portions (brackets), and each portion is taxed at a specific rate. Your marginal tax rate is the rate applied to your last dollar earned.
How This Calculator Works:
This calculator provides an *estimate* of your federal income tax. It uses the following simplified process:
It takes your Gross Annual Income.
It subtracts your Total Deductions to determine your Taxable Income.
It then applies the current federal income tax brackets based on your selected Filing Status.
Please note that this calculator uses simplified tax bracket data for illustrative purposes. Actual tax laws and figures can change annually, and specific situations (like capital gains, credits, or specific types of income) may require more complex calculations. Always consult IRS publications or a qualified tax professional for accurate tax advice.