🇺🇸 Federal Income Tax Calculator
Estimate your federal and state tax burden
Updated for 2023 tax year on Mar 01, 2023
Income tax calculators by state
United States federal income tax calculation
Benjamin Franklin once said: In this world nothing can be said to be certain, except death and taxes
. The government of the USA subjects all residents and citizens to income taxes, including investments, overseas incomes, etc. Not reporting and paying taxes is tax evasion and a criminal offence.
The 12-month period for federal taxes begins on October 1st and ends on September 30th of the following year. For instance, the tax year 2023 starts on October 1st, 2022, and ends on September 30th, 2023. On the other hand, each state establishes its 12-month tax year. While some states follow the federal tax year, others begin on July 1st and end on June 30th.
Federal income tax is calculated based on a progressive system, where those earning more pay a higher percentage of their income in taxes. Some states also have a progressive system, while others have a single tax rate for all income levels. Additionally, eight states do not have an income tax, and one state (New Hampshire) does not have a wage income tax. Some counties, cities, and districts may also have a local income tax, but this is rare. To calculate income tax, you determine the taxable income by subtracting deductions and exemptions.
The Federal Insurance Contributions Act (FICA) constitutes the federal payroll tax, which comprises two separate taxes. Payroll taxes are only present in some states and are based on your taxable wage, as the name suggests.
How to calculate your income taxes
There are six key steps to determine your total income tax. The income tax calculator above follows the exact steps mentioned below.
Step 1 – Determine your filing status
There are four main filing statuses:
- Single
- Married, Filing Jointly or Widow(er)
- Married, Filing Separately
- Head of Household
Your marital status and whether you have any dependents will determine your filing status.
For example, if you are single and have a child, you should file as ‘Head of Household’.
Suppose you are married but preferred to file separately from your partner (highly inadvisable). In that case, you will file as ‘Married, Filing Separately’.
Refer to IRS to understand more.
Step 2 – Figure out your adjusted gross income
In this step, you must work out your adjusted gross income by removing retirement contributions from your total annual gross income. Contributions 401(k) and IRA are considered retirement contributions.
The formula is:
Gross income − Retirement contributions = Adjusted gross income
The more you contribute to your retirement funds, the lower your adjusted gross income will be, leading to lesser income tax. However, there is a limit on how much you can contribute to your 401(k) and IRA.
The maximum employee 401(k) contribution limit for the tax year 2022 is $20,500. If you are age 50 or older, you can contribute an additional $6,500. For IRA contributions, the limit is $6,000 ($7,000 if you’re age 50 or older) for the tax year 2022.
Step 3 – Calculate federal/state taxable income
Now you have to calculate your taxable income to understand your tax liability. It would help if you worked out the taxable income for federal and state separately, as their formulas are slightly different. The key differences are:
- Different standard deduction
- Some states still have personal exemptions (after Tax Cuts and Jobs Act)
The formula for calculating federal taxable income is as follows:
Adjusted gross income − Standard/Itemized deductions = Federal taxable income
The procedure to derive the state taxable income is as follows:
Adjusted gross income − (Standard/Itemized deductions + Exemptions) = State taxable income
Step 4 – Federal/state/local tax liability
Like the previous step, you need to use the respective taxable income for federal and state. Local tax liability is based on state taxable income.
The formula to determine federal tax liability is as follows:
Federal taxable income × Federal tax rate = Federal tax liability
The formula to calculate state tax liability is as follows:
State taxable income × State tax rate = State tax liability
The formula to work out local tax liability is as follows:
State taxable income × Local tax rate = Local tax liability
Step 5 – FICA & state payroll tax liability
Payroll tax is based on the taxable wage (gross income) hence the name. Unless income tax, each payroll tax has a gross income ceiling. FICA consists of two taxes: Social Security and Medicare.
The formula to calculate federal/state payroll tax liability is:
Gross income × FICA/State payroll tax rate = FICA/State payroll tax liability
Step 6 – Add all taxes
The final step is subtracting all the tax liabilities from your gross income.
The formula is:
Federal tax liability + State tax liability + Local tax liability + FICA tax liability + State payroll tax liability = Total income taxes
Federal Insurance Contributions Act (FICA)
The two mandatory payroll taxes that make up the FICA tax are Social Security and Medicare, and employees and employers must contribute an equal amount to each tax. However, self-employed individuals are responsible for paying the full amount themselves.
Social Security
Tax year | Employment status | Gross income | Rate |
---|---|---|---|
2023 | Employer | Up to $160,200 | 6.20% |
Employee | 6.20% | ||
Self-employed | 12.40% | ||
2022 | Employer | Up to $147,000 | 6.20% |
Employee | 6.20% | ||
Self-employed | 12.40% | ||
2021 | Employer | Up to $142,800 | 6.20% |
Employee | 6.20% | ||
Self-employed | 12.40% | ||
2020 | Employer | Up to $137,700 | 6.20% |
Employee | 6.20% | ||
Self-employed | 12.40% |
Medicare
Tax year | Employment status | Filing status | Gross income | Rate |
---|---|---|---|---|
2023 2022 2021 2020 |
Employer | Single & Head of Household | Up to $200,000 | 1.45% |
Married Jointly | Up to $250,000 | |||
Married Separately | Up to $125,000 | |||
Single & Head of Household | $200,000 and over | 2.35% | ||
Married Jointly | $250,000 and over | |||
Married Separately | $125,000 and over | |||
Employee | Single & Head of Household | Up to $200,000 | 1.45% | |
Married Jointly | Up to $250,000 | |||
Married Separately | Up to $125,000 | |||
Single & Head of Household | $200,000 and over | 2.35% | ||
Married Jointly | $250,000 and over | |||
Married Separately | $125,000 and over | |||
Self-employed | Single & Head of Household | Up to $200,000 | 2.90% | |
Married Jointly | Up to $250,000 | |||
Married Separately | Up to $125,000 | |||
Single & Head of Household | $200,000 and over | 3.80% | ||
Married Jointly | $250,000 and over | |||
Married Separately | $125,000 and over |
Federal income tax brackets
The federal tax brackets differ every year as IRS adjusts them for inflation. For the latest on federal income tax brackets, refer to Tax Foundation.
Regards to state income tax brackets it varies from state to state. Some states have had the same rate for years, and some adjust their brackets every year.
Tax year | Filing status | Taxable income | Rate |
---|---|---|---|
2023 | Single | $0 - $11,000 | 10% |
$11,001 - $44,725 | 12% | ||
$44,726 - $95,375 | 22% | ||
$95,376 - $182,100 | 24% | ||
$182,101 - $231,250 | 32% | ||
$231,251 - $578,125 | 35% | ||
$578,126 and over | 37% | ||
Married, Filing Jointly or Widow(er) | $0 - $22,000 | 10% | |
$22,001 - $89,450 | 12% | ||
$89,451 - $190,750 | 22% | ||
$190,751 - $364,200 | 24% | ||
$364,201 - $462,500 | 32% | ||
$462,501 - $693,750 | 35% | ||
$693,751 and over | 37% | ||
Married, Filing Separately | $0 - $11,000 | 10% | |
$11,001 - $44,725 | 12% | ||
$44,726 - $95,375 | 22% | ||
$95,376 - $182,100 | 24% | ||
$182,101 - $231,250 | 32% | ||
$231,251 - $346,875 | 35% | ||
$346,876 and over | 37% | ||
Head of Household | $0 - $15,700 | 10% | |
$15,701 - $59,850 | 12% | ||
$59,851 - $95,350 | 22% | ||
$95,351 - $182,100 | 24% | ||
$182,101 - $231,250 | 32% | ||
$231,251 - $578,100 | 35% | ||
$578,101 and over | 37% | ||
2022 | Single | $0 - $10,275 | 10% |
$10,276 - $41,775 | 12% | ||
$41,776 - $89,075 | 22% | ||
$89,076 - $170,050 | 24% | ||
$170,051 - $215,950 | 32% | ||
$215,951 - $539,900 | 35% | ||
$539,901 and over | 37% | ||
Married, Filing Jointly or Widow(er) | $0 - $20,550 | 10% | |
$20,551 - $83,550 | 12% | ||
$83,551 - $178,150 | 22% | ||
$178,151 - $340,100 | 24% | ||
$340,101 - $431,900 | 32% | ||
$431,901 - $647,850 | 35% | ||
$647,851 and over | 37% | ||
Married, Filing Separately | $0 - $10,275 | 10% | |
$10,276 - $41,775 | 12% | ||
$41,776 - $89,075 | 22% | ||
$89,076 - $170,050 | 24% | ||
$170,051 - $215,950 | 32% | ||
$215,951 - $323,925 | 35% | ||
$323,926 and over | 37% | ||
Head of Household | $0 - $14,650 | 10% | |
$14,651 - $55,900 | 12% | ||
$55,901 - $89,050 | 22% | ||
$89,051 - $170,050 | 24% | ||
$170,051 - $215,950 | 32% | ||
$215,951 - $539,900 | 35% | ||
$539,901 and over | 37% | ||
2021 | Single | $0 - $9,950 | 10% |
$9,951 - $40,525 | 12% | ||
$40,526 - $86,375 | 22% | ||
$86,376 - $164,925 | 24% | ||
$164,926 - $209,425 | 32% | ||
$209,426 - $523,600 | 35% | ||
$523,601 and over | 37% | ||
Married, Filing Jointly or Widow(er) | $0 - $19,900 | 10% | |
$19,901 - $81,050 | 12% | ||
$81,051 - $171,050 | 22% | ||
$172,751 - $329,850 | 24% | ||
$329,851 - $418,850 | 32% | ||
$418,851 - $628,300 | 35% | ||
$628,301 and over | 37% | ||
Married, Filing Separately | $0 - $9,950 | 10% | |
$9,951 - $40,525 | 12% | ||
$40,526 - $86,375 | 22% | ||
$86,376 - $164,925 | 24% | ||
$164,926 - $209,425 | 32% | ||
$209,426 - $314,150 | 35% | ||
$314,151 and over | 37% | ||
Head of Household | $0 - $14,200 | 10% | |
$14,201 - $54,200 | 12% | ||
$54,201 - $86,350 | 22% | ||
$86,351 - $164,900 | 24% | ||
$164,901 - $209,400 | 32% | ||
$209,401 - $523,600 | 35% | ||
$523,601 and over | 37% | ||
2020 | Single | $0 - $9,875 | 10% |
$9,876 - $40,125 | 12% | ||
$40,126 - $85,525 | 22% | ||
$85,526 - $163,300 | 24% | ||
$163,301 - $207,350 | 32% | ||
$207,351 - $518,400 | 35% | ||
$518,401 and over | 37% | ||
Married, Filing Jointly or Widow(er) | $0 - $19,750 | 10% | |
$19,751 - $80,250 | 12% | ||
$80,251 - $171,050 | 22% | ||
$171,051 - $326,600 | 24% | ||
$326,601 - $414,700 | 32% | ||
$414,701 - $622,050 | 35% | ||
$622,051 and over | 37% | ||
Married, Filing Separately | $0 - $9,875 | 10% | |
$9,876 - $40,125 | 12% | ||
$40,126 - $85,525 | 22% | ||
$85,526 - $163,300 | 24% | ||
$163,301 - $207,350 | 32% | ||
$207,351 - $311,025 | 35% | ||
$311,026 and over | 37% | ||
Head of Household | $0 - $14,100 | 10% | |
$14,101 - $53,700 | 12% | ||
$53,701 - $85,500 | 22% | ||
$85,501 - $163,300 | 24% | ||
$163,301 - $207,350 | 32% | ||
$207,351 - $518,400 | 35% | ||
$518,401 and over | 37% |
Retirement contributions
There is an annual limit on how much you can contribute to your retirement funds.
The maximum employee 401(k) contribution limit for the tax year 2022 is $20,500 for those under 50 and $27,000 for those over 50 or older. For IRA contributions, the yearly limit is $6,000 ($7,000 if you’re age 50 or older) for the tax year 2022.
Tax type | Tax year | Age | Limit |
---|---|---|---|
401(k) | 2023 | Under 50 | $22,500 |
Over 50 | $30000 | 2022 | Under 50 | $20,500 |
Over 50 | $27,000 | ||
2021 | Under 50 | $19,500 | |
Over 50 | $26,000 | ||
IRA | 2023 | Under 50 | $6,500 |
Over 50 | $7,500 | 2022 2021 2020 |
Under 50 | $6,000 |
Over 50 | $7,000 |
Standard deduction
You can use the standard deduction or itemize deductions in your income tax calculation. As a thumb of rule, if your itemized deductions are less than the standard deduction, it is wiser to claim the standard deduction amount.
For a list of itemizable deductions, refer to Dough Roller’s ultimate list.
Tax year | Filing status | Standard deduction amount |
---|---|---|
2023 | Single | $13,850 |
Married, Filing Jointly | $27,700 | |
Married, Filing Separately | $13,850 | |
Head of Household | $20,800 | |
2022 | Single | $12,950 |
Married, Filing Jointly | $25,900 | |
Married, Filing Separately | $12,950 | |
Head of Household | $19,400 | |
2021 | Single | $12,550 |
Married, Filing Jointly | $25,100 | |
Married, Filing Separately | $12,550 | |
Head of Household | $18,800 | |
2020 | Single | $12,200 |
Married, Filing Jointly | $24,400 | |
Married, Filing Separately | $12,200 | |
Head of Household | $18,350 |
FAQs
How do I calculate tax income?
You must follow the six steps below to work out your federal/state/local income taxes.
- Step 1 - Determine your filing status
- Step 2 - Gross income − Retirement contributions = Adjusted gross income
- Step 3 - Adjusted gross income − Standard/Itemized deductions = Taxable income
- Step 4 - Taxable income × Tax rate = Tax liability
- Step 5 - Gross income × Payroll tax rate = Payroll tax liability
- Step 6 - Federal tax liability + Tax liability + Payroll tax liability = Total income taxes
How do you calculate income tax after salary?
First, follow our six steps formula to calculate the total income taxes. Then subtract the total taxes from your gross income. If a single filer earns $60,000 annually and the total income tax is $9,000, the after-tax income will be $51,000.