How progressive brackets work
The calculator applies each rate only to the portion of ordinary taxable income inside that bracket. Reaching a higher bracket does not cause the lower portions of income to be taxed again at the higher rate.
Frequently asked questions
What income should I enter?
Enter federal ordinary taxable income after deductions, not gross pay or AGI. The calculator does not subtract the standard deduction, itemized deductions, or Schedule 1-A deductions for you.
Does a higher bracket apply to all taxable income?
No. Federal brackets are progressive. Only the portion of taxable income within a bracket is taxed at that bracket's rate. The marginal rate is the rate on the last portion of income, while the effective rate is total calculated tax divided by taxable income.
Which types of income are outside this calculation?
The tool models federal ordinary-income brackets only. It does not apply preferential capital-gain or qualified-dividend rates, credits, alternative minimum tax, self-employment tax, additional taxes, or state tax.