Finance
Tax Bracket Calculator
Determine your marginal tax bracket and estimate your effective federal income tax rate.
Inputs
Results
Marginal Tax Bracket
0%
Estimated Total Tax
$0.00
Effective Tax Rate
0.00%
How It Works
The tax bracket calculator applies progressive federal income tax rates to your taxable income. Under a progressive system, your income is divided into segments, and each segment is taxed at its corresponding bracket rate. Your **marginal tax rate** is the percentage charged on your highest dollar of income. Your **effective tax rate** is the average percentage of your total income paid in tax, calculated as: `Total Tax / Taxable Income`.
Formula Used
Effective Tax Rate = (Total Progressive Tax / Taxable Income) × 100
The effective tax rate represents the average tax rate paid on all taxable income. It is calculated by dividing the total progressive tax liability (sum of tax in each bracket) by the taxable income.
Worked Example
Here is a step-by-step example of how these values are calculated:
Taxable Income
$85,000
Filing Status
Single
Result: Marginal Tax Bracket: 22%. Total Federal Tax: $13,751.50. Effective Tax Rate: 16.18%.
Frequently Asked Questions
Does moving to a higher tax bracket reduce my net income?
No, that is a common misconception. Only the portion of your income that falls within the new bracket is taxed at the higher rate. The income below that threshold remains taxed at the lower bracket rates.
What is the difference between adjusted gross income and taxable income?
Adjusted Gross Income (AGI) is your gross income minus specific adjustments (like student loan interest). Taxable income is your AGI minus either the standard deduction or itemized deductions. This calculator uses taxable income as its input base.