How federal income tax works
The US uses a progressive federal income tax with seven brackets from 10% to 37%. Only the income inside each bracket is taxed at that bracket's rate.
Your tax is calculated on taxable income — gross income minus the standard deduction (or itemized deductions). For 2025 the standard deduction is $15,750 single, $31,500 married filing jointly, and $23,625 head of household.
Because of the brackets, your effective rate (total tax ÷ income) is always lower than your top marginal rate.
Marginal vs effective rate
Your marginal rate is the rate on your next dollar earned — useful for deciding whether extra income or a deduction is worth it.
Your effective rate is what you actually pay across all your income. The calculator shows both so you can see the real picture, not just the headline bracket.
What this does not include
This estimate covers federal income tax only. It excludes payroll (FICA) taxes, state income tax, and tax credits such as the child tax credit or earned income credit, which can substantially change your final bill.
This is a federal estimate using 2025 tax-year figures and the inputs you provide. It does not include state tax, credits, or every deduction. Confirm with the IRS or a tax professional before filing.
Frequently asked questions
How is federal income tax calculated?
Your taxable income (gross income minus deductions) is run through the federal brackets, where each slice of income is taxed at its bracket's rate. The totals add up to your federal income tax.
What is the standard deduction for 2025?
$15,750 for single filers, $31,500 for married filing jointly, and $23,625 for head of household. It reduces the income that gets taxed.
Does this include Social Security and Medicare?
No. Those are payroll (FICA) taxes, calculated separately. Use the payroll tax or paycheck calculator to include them.
Why is my effective rate lower than my bracket?
Because only the income within your top bracket is taxed at that rate; the rest is taxed at the lower brackets below it. The blended result is your effective rate.