US federal income tax is progressive: each slice of income is taxed at its bracket rate. Enter your income to see the tax owed, your marginal bracket and your effective rate.
The marginal rate is what your next dollar is taxed at; the effective rate — total tax divided by income — is always lower and is the honest summary of your burden.
State income tax, FICA and deductions beyond the standard deduction are not included.
The standard deduction is applied before brackets, which is why the first slice of income is effectively untaxed. Itemising only helps when deductible expenses exceed it, and since the deduction rose the great majority of filers no longer itemise at all.
Credits and deductions are not interchangeable, and the difference is large. A deduction reduces taxable income, so it is worth your marginal rate — a €1,000 deduction at 24% saves €240. A credit reduces the tax itself, so €1,000 saves €1,000, and some credits are refundable beyond what you owe.
Long-term capital gains and qualified dividends sit in their own rate schedule stacked on top of ordinary income, so they are not taxed at the bracket shown here. That is why two people with the same total income can owe very different amounts depending on where the income came from.
Frequently asked questions
What is the difference between marginal and effective tax rate?
The marginal rate is what your next dollar of income is taxed at; the effective rate is total tax divided by total income. The effective rate is always lower in a progressive system.
Does entering a higher bracket reduce my take-home pay?
No — that is the most common tax myth. Only the income above the bracket threshold is taxed at the higher rate; everything below keeps its lower rates.
What does this estimate leave out?
State income tax, FICA payroll taxes, tax credits and any deductions beyond the standard deduction. Your full return can differ substantially.