Income Tax Calculator: Estimate Federal and State Taxes
Calculate your estimated federal, state, and FICA taxes based on your income, filing status, and location with our comprehensive income tax calculator. Plan your finances with accurate tax estimates.
Category: Financial
Frequently Asked Questions
What is the difference between marginal and effective tax rates?
The marginal tax rate is the tax rate you pay on your last dollar of income or the rate applied to your highest income bracket. The effective tax rate is your total tax divided by your total income, representing the average rate you pay across all income. Due to the progressive nature of the tax system, your effective rate is typically lower than your marginal rate.
How do tax brackets work in the United States?
The U.S. uses a progressive tax system with income brackets. Each portion of your income is taxed at the rate for the bracket it falls into, not your entire income at your highest bracket rate. For example, if you're in the 22% bracket, only the income that falls within that bracket is taxed at 22%, while lower portions are taxed at the lower bracket rates.
What's the difference between gross income and taxable income?
Gross income is your total earnings before any deductions or adjustments. Taxable income is the amount subject to income tax after accounting for deductions, adjustments, and exemptions. The difference can be significant, as various deductions like the standard deduction, itemized deductions, and retirement contributions can substantially reduce your taxable income.
How do state income taxes vary across the United States?
State income taxes vary widely across the U.S. Some states like Texas, Florida, Nevada, and Washington have no state income tax. Others like California, New York, and Hawaii have relatively high income tax rates with progressive brackets similar to the federal system. Some states use a flat tax rate regardless of income level, while others have their own bracket systems.
What are FICA taxes and why do I pay them?
FICA (Federal Insurance Contributions Act) taxes fund Social Security and Medicare programs. They consist of Social Security tax (6.2% on wages up to the wage base limit) and Medicare tax (1.45% on all wages, plus an additional 0.9% for high earners). Employers match employee contributions. Self-employed individuals pay both portions as self-employment tax. These taxes provide retirement, disability, and hospital benefits for eligible Americans.