💰 Income Tax Calculator

Your marginal tax rate is the rate you pay on your last dollar of income - it's your highest tax bracket. Your effective tax rate is your total tax divided by your total income, which is always lower because of progressive taxation. For example, if you're in the 22% bracket, you don't pay 22% on all your income - only on the portion that falls in that bracket.

Take whichever is higher. For 2024, the standard deduction is $14,600 (single) or $29,200 (married filing jointly). You should itemize only if your deductible expenses (mortgage interest, state/local taxes up to $10,000, charitable donations, medical expenses over 7.5% of AGI) exceed the standard deduction. Most taxpayers benefit from the standard deduction.

Contribute to pre-tax retirement accounts (401k, traditional IRA), HSA, or FSA. These contributions reduce your adjusted gross income. You can also consider tax-loss harvesting in investment accounts, bunching charitable donations, or deferring income to the next year if you expect to be in a lower bracket.

A tax deduction reduces your taxable income (saving you your marginal tax rate on that amount), while a tax credit directly reduces your tax owed dollar-for-dollar. For example, a $1,000 deduction in the 22% bracket saves you $220, but a $1,000 credit saves you $1,000. Credits are more valuable.

Federal income tax returns are typically due on April 15th (or the next business day if it falls on a weekend/holiday). You can file for an automatic 6-month extension to October 15th, but any taxes owed are still due by April 15th to avoid penalties and interest.

If you're self-employed, have significant investment income, or don't have enough tax withheld from your paycheck, you may need to pay estimated quarterly taxes. Generally, if you expect to owe $1,000 or more when you file, you should make quarterly payments to avoid underpayment penalties. Payments are due April 15, June 15, September 15, and January 15.

Don't worry - you only pay the higher rate on income that falls within that bracket, not on all your income. For example, if you're single and earn $50,000, you pay 10% on the first $11,600, 12% on income from $11,600 to $47,150, and 22% only on the remaining $2,850. This is called progressive taxation.