Income Tax Calculator 2026

Understanding how progressive tax brackets work is essential for tax planning. ### Complete 2026 Federal Tax Brackets #### Single Filers | Tax Rate | Income Range | Tax Owed on Range | |----------|--------------|-------------------| | 10% | $0 - $12,400 | $0 - $1,240 | | 12% | $12,401 - $50,400 | $1,240 - $5,800 | | 22% | $50,401 - $105,700 | $5,800 - $17,966 | | 24% | $105,701 - $201,775 | $17,966 - $41,041 | | 32% | $201,776 - $256,225 | $41,041 - $58,465 | | 35% | $256,226 - $640,600 | $58,465 - $193,016 | | 37% | Over $640,600 | $193,016+ | #### Married Filing Jointly | Tax Rate | Income Range | Tax Owed on Range | |----------|--------------|-------------------| | 10% | $0 - $24,800 | $0 - $2,480 | | 12% | $24,801 - $100,800 | $2,480 - $11,600 | | 22% | $100,801 - $211,400 | $11,600 - $35,932 | | 24% | $211,401 - $403,550 | $35,932 - $82,088 | | 32% | $403,551 - $512,450 | $82,088 - $116,936 | | 35% | $512,451 - $768,600 | $116,936 - $206,589 | | 37% | Over $768,600 | $206,589+ | ### Progressive Tax Example **Scenario:** Single filer, $100,000 gross income 1. **Standard Deduction:** -$16,100 2. **Taxable Income:** $83,900 3. **Tax Calculation:** - 10% on $12,400 = $1,240 - 12% on $38,000 ($12,401-$50,400) = $4,560 - 22% on $33,500 ($50,401-$83,900) = $7,370 4. **Total Federal Tax:** $13,170 5. **Effective Tax Rate:** 13.2% (not 22%!) 6. **Marginal Rate:** 22% (rate on last dollar) **Key Insight:** Even though this person is in the "22% bracket," they actually pay 13.2% of their income in federal taxes due to progressive rates and the standard deduction.

Choosing between standard and itemized deductions can save thousands. ### 2026 Standard Deduction Amounts | Filing Status | Standard Deduction | 65+ Additional | |---------------|-------------------|----------------| | Single | $16,100 | +$2,050 | | Married Filing Jointly | $32,200 | +$1,650 each | | Married Filing Separately | $16,100 | +$1,650 | | Head of Household | $24,150 | +$2,050 | **New for Seniors (OBBBA 2026-2028):** Additional deduction for those 65+ at end of 2026: Up to $6,000 (single) or $12,000 (married jointly if both qualify). ### Common Itemized Deductions **State and Local Taxes (SALT):** - Capped at $40,400 for 2026 (increased from $10,000 previously) - Includes state income tax, property tax **Mortgage Interest:** - On loans up to $750,000 (acquisition debt) - Must be for primary or second home **Charitable Contributions:** - Cash donations: up to 60% of AGI - Non-cash (clothing, goods): fair market value - **New:** Non-itemizers can deduct up to $1,000 (single) or $2,000 (married) in cash donations **Medical Expenses:** - Only amounts exceeding 7.5% of AGI - Includes insurance premiums, prescriptions, doctor visits **When to Itemize:** Only if total itemized deductions > standard deduction. **Example:** - Married couple - State taxes: $15,000 - Mortgage interest: $12,000 - Charity: $5,000 - **Total Itemized:** $32,000 Standard deduction ($32,200) is HIGHER → Take standard deduction. **Pro Tip:** "Bunching" deductions—making multiple years of charitable donations in one year can push you over the standard deduction threshold, maximizing tax savings.

Tax credits are more valuable than deductions—understand the difference. ### Deductions vs Credits **Tax Deduction:** - Reduces your **taxable income** - Value depends on your tax bracket - Example: $1,000 deduction in 22% bracket = $220 tax savings **Tax Credit:** - Reduces your **tax owed dollar-for-dollar** - Full value regardless of bracket - Example: $1,000 credit = $1,000 tax savings ### Major Federal Tax Credits (2026) #### Child Tax Credit - **Amount:** $2,000 per qualifying child under 17 - **Refundable Portion:** Up to $1,700 per child - **Phase-Out:** Begins at $200,000 (single) / $400,000 (married) #### Child and Dependent Care Credit - **Amount:** Up to $3,000 per child (max $6,000 for 2+ children) - **Percentage:** 20-35% depending on income - **Qualifying:** Daycare, preschool, summer camp while working #### Earned Income Tax Credit (EITC) - **Amount:** Up to $7,830 (2026, 3+ children) - **Eligibility:** Low to moderate income workers - **Requirements:** Must have earned income, file tax return #### Education Credits **American Opportunity Credit:** - **Amount:** Up to $2,500 per student - **Years:** First 4 years of college - **Refundable:** 40% (up to $1,000) **Lifetime Learning Credit:** - **Amount:** Up to $2,000 per return - **Eligibility:** Any post-secondary education - **Not refundable** #### Saver's Credit (Retirement Contributions) - **Amount:** 10%, 20%, or 50% of contributions (up to $1,000 single/$2,000 married) - **Eligibility:** Low to moderate income - **Applies to:** 401(k), IRA, 403(b) contributions ### Refundable vs Non-Refundable Credits **Non-Refundable:** Can only reduce tax to $0, no refund if credit exceeds tax owed **Refundable:** Excess credit is refunded to you - EITC (fully refundable) - Child Tax Credit (partially refundable - $1,700 per child) - American Opportunity Credit (partially refundable - 40%) **Example Power of Credits:** Scenario: Tax owed before credits = $5,000 - Child Tax Credit (2 kids): -$4,000 - **New tax owed:** $1,000 - American Opportunity Credit: -$2,500 - **Tax owed:** $0 - **Refund:** $1,500 (refundable portion) This family turned a $5,000 tax bill into a $1,500 refund through credits!