Federal Income Tax Calculator
Estimate what you owe the IRS for the 2026 tax year — your taxable income, the tax in each bracket, your effective and marginal rates, and whether you are heading for a refund or a balance due.
What this calculator estimates
This tool works out your federal income tax for the 2026 tax year from the income, deductions, and credits you enter. It reports your adjusted gross income, your taxable income, the tax charged in each rate band, your effective and marginal rates, and the difference between what you owe and what you have already paid.
It is built for the situation most households are in: wages, some interest and dividends, perhaps an investment sale, a retirement contribution, and a couple of dependents. It is not a substitute for filing a return, and it does not attempt to reproduce every schedule on a Form 1040.
How to use it
- Pick your filing status. This drives your rate schedule, your standard deduction, and most of the thresholds that follow.
- Enter your income. Only wages are required; leave anything that does not apply to you blank.
- Add any adjustments — retirement contributions, HSA contributions, student loan interest — and your total itemized deductions if you plan to itemize.
- Enter how much tax has already been withheld from your pay. Without this the calculator can show your tax but not your refund.
- Read the results panel. It updates as you type, so you can change one figure and see the effect immediately.
The Load example button fills in a complete scenario if you would rather see how the pieces fit together before entering your own numbers.
How the calculation works
Federal income tax is not one calculation but a sequence, and the order matters more than most people expect.
Your income sources are added together to give gross income. From that, certain deductions come off before anything else — retirement and HSA contributions, student loan interest, half of any self-employment tax. These are the above-the-line adjustments, and what is left is your adjusted gross income, or AGI. AGI matters beyond the tax itself, because it is the figure that phaseouts for credits and surtaxes are measured against.
Next comes the larger of your standard deduction or your itemized deductions. Subtracting it leaves taxable income, and only then do rates enter the picture.
Taxable income is split into two layers. Ordinary income — wages, interest, short-term gains, retirement distributions — runs through the progressive rate schedule, where the first slice is taxed at 10%, the next at 12%, and so on. Qualified dividends and long-term capital gains form a second layer that sits on top and is taxed at 0%, 15%, or 20%. Because the preferential layer stacks above your ordinary income, the same $20,000 gain can be taxed at nothing or at 20% depending entirely on what you earn from your job.
Self-employment tax, the Additional Medicare Tax, and the net investment income tax are then added where they apply. Credits come off the total, payments come off after that, and what remains is your refund or your balance due.
A worked example
Consider a married couple filing jointly with $138,000 of wages, $900 of interest, $2,400 of dividends of which $2,100 are qualified, a $9,500 long-term gain, a $7,000 traditional IRA contribution, $1,800 of student loan interest, and two children under 17. They had $15,200 withheld.
Their gross income is $150,800. Adjustments of $8,800 bring AGI to $142,000. The 2026 joint standard deduction of $32,200 exceeds anything they could itemize, so taxable income is $109,800. Of that, $11,600 sits in the preferential layer, leaving $98,200 of ordinary income taxed at 10% and 12%. Their two children bring $4,400 of child tax credit. Against $15,200 of withholding, they end up with a refund.
Load that scenario with the example button to see every line of it.
Important limitations
An estimate is only as good as what it leaves out, so here is what this one does not do.
- No alternative minimum tax. The AMT is a parallel calculation that mainly affects high earners with large deductions or incentive stock options. This tool does not run it.
- No refundable child tax credit. The refundable cap for 2026 could not be confirmed against a primary IRS source, so the child tax credit is applied only against tax owed. If you qualify for the refundable portion, your actual refund may be larger than shown.
- No SALT cap. The 2026 limit on the state and local tax deduction was not confirmed, so your itemized figure is used as entered without an automatic cap.
- No earned income credit, education credits, or premium tax credit. Each has eligibility tests this tool does not attempt.
- No qualified business income deduction. The Section 199A deduction can materially reduce tax on business income and is not modelled.
- No state or local tax. Federal only.
Your actual tax may differ from this estimate. Eligibility for most credits and deductions depends on your complete tax situation.
Frequently asked questions
Why is my effective tax rate lower than my tax bracket?
Your bracket is the rate on your last dollar of income, not on all of it. Income is taxed in layers: the first portion at 10%, the next at 12%, and so on up. Someone in the 22% bracket pays 22% only on the part of their income that reaches that band. The effective rate — total tax divided by income — is always lower than the top bracket, often much lower.
Does this include state income tax?
No. This is a federal estimate. State income tax is calculated separately under each state's own rules, and nine jurisdictions have no broad individual income tax on wages at all.
Why does my estimate differ from my tax software?
Tax software runs every schedule and credit; this calculator covers the common ones. The most likely sources of a gap are the refundable child tax credit, the qualified business income deduction, education or earned income credits, or the alternative minimum tax — none of which are included here.
Should I take the standard deduction or itemize?
Whichever is larger. Enter your total itemized deductions and the calculator applies the better of the two automatically, then tells you which one it used. For most households the standard deduction wins comfortably.
Are these figures official?
The 2026 rate schedules, standard deductions, additional deductions for age and blindness, and capital gains thresholds are transcribed from IRS Rev. Proc. 2025-32 as published in Internal Revenue Bulletin 2025-45. Where a figure could not be confirmed against a primary source it is excluded rather than guessed, and the results panel tells you when that has affected your estimate.
Is anything I type sent anywhere?
No. Every calculation runs in your browser. Nothing you enter is transmitted, logged, or stored on a server. The "copy link" button builds a shareable URL in your address bar containing your inputs — that link is yours to share or not.
Official sources
- IRS Rev. Proc. 2025-32 — 2026 rate schedules, standard deductions, and capital gains thresholds.
- Social Security Administration — contribution and benefit base.
- IRS Form 1040 and instructions — the return this estimate approximates.
See our methodology for how these figures are transcribed and reviewed, and our sources page for the full list.
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This calculator is provided for general educational and estimation purposes only. It does not constitute tax, legal, accounting, or financial advice. Tax laws and individual circumstances vary, and your actual tax liability may differ. Review official IRS guidance or consult a qualified tax professional before making tax-related decisions. Ledgerwise is not affiliated with, endorsed by, or approved by the Internal Revenue Service or any government agency.