Income Tax Calculator

Trying to find out what tax bracket you are in? Use the calculator below to estimate how much you will owe in taxes. Select your household income in the top left to start!

Every April 15 (or July 15, 2020, due to the pandemic), Americans must file their Federal Income taxes. Whether you’ll see a handy direct deposit in your bank account or have to pay the Internal Revenue Service (IRS) depends on many factors:

  • How much you paid in payroll withholding taxes (or quarterly taxes for independent contractors) over the past year
  • Any deductions, exemptions and tax credits you qualify for
  • Your number of dependents
  • Your filing status (single; married, filing jointly; married, filing separately)
  • Your tax bracket

The final factor, your tax bracket, plays a big role in whether you’ll receive a tax refund or pay a tax bill.

The IRS has established seven tax brackets, ranging from 10% of your taxable income up to 37% if you make more than $510,300 as an individual or $612,350 for taxpayers who are married, filing jointly. The highest percent you pay is called your “top marginal tax rate.”

You can see the different tax brackets on the chart below.

Single Filers
Taxable Income Rate
$0 – $9,700 10%
$9,700 – $39,475 12%
$39,475 – $84,200 22%
$84,200 – $160,725 24%
$160,725 – $204,100 32%
$204,100 – $510,300 35%
$510,300+ 37%

 

Married, Filing Jointly
Taxable Income Rate
$0 – $19,400 10%
$19,400 – $78,950 12%
$78,950 – $168,400 22%
$168,400 – $321,450 24%
$321,450 – $408,200 32%
$408,200 – $612,350 35%
$612,350+ 37%

 

Married, Filing Separately
Taxable Income Rate
$0 – $9,700 10%
$9,700 – $39,475 12%
$39,475 – $84,200 22%
$84,200 – $160,725 24%
$160,725 – $204,100 32%
$204,100 – $306,175 35%
$306,175+ 37%

 

Head of Household
Taxable Income Rate
$0 – $13,850 10%
$13,850 – $52,850 12%
$52,850 – $84,200 22%
$84,200 – $160,700 24%
$160,700 – $204,100 32%
$204,100 – $510,300 35%
$510,300+ 37%

 
However, even if you fall into the highest tax bracket, you don’t pay the full 37% on all of your income. Instead, you’d pay 10% on the first $9,700 of your income, 12% on the next $39,475, and so on. Only income earned beyond $510,300 will be taxed at the highest rate.

You can see how complicated tax filing can be, even before we start talking about calculating taxable income after exemptions, adjustments, and deductions.

Calculating Your Taxable Income

Americans pay income taxes based on income after deductions, exemptions, and, in the case of business owners and sole proprietors, expenses – otherwise called your taxable income.

To calculate your taxable income, take your gross income and subtract any eligible expenses or adjustments. These may include:

  • Retirement contributions not deducted from your paycheck
  • Student loan interest
  • Alimony payments
  • The number once you’ve made these adjustments is called your adjusted gross income or AGI. Our Federal Income Tax Calculator can help you find this number.

Special Tips for 1099 Independent Contractors

For independent contractors and sole proprietors, your gross income totals your company revenue (most often, the total of all the 1099 forms you received, although you must also include income not reported on 1099-MISC forms), minus any business expenses.

Business expenses can include, but aren’t limited to:

  • Phone and other electronic devices used for business
  • Internet and other utilities
  • Marketing and advertising expenses
  • Home office
  • Vehicles used for your business
  • Education related to your business
  • Office supplies

If you’re an independent contractor, you’d calculate your AGI based on your company revenue minus expenses minus any other adjustments, such as retirement contributions.

Taking the Tax Deductions You Deserve

If you look at your AGI and feel like it’s still a pretty big number, don’t worry. You worked hard and earned it – but you won’t have to pay taxes on all of it.

Subtract any deductions you can take from your AGI to arrive at your taxable income. That final number determines your tax bracket and, ultimately, how much you owe the IRS – or if you’ll get money back this year.

Many people opt to take the “standard deduction” rather than calculating all their deductible expenses for the year. If you aren’t going to college, don’t own a home, and don’t have exceptional medical bills, the standard deduction probably exceeds your itemized deductions.

Standard deductions vary, as follows, based on your filing status:

Single: $12,200
Married, Filing Jointly: $24,400
Married, Filing Separately: $12,200
Head of Household: $18,350

If you choose to items, you’ll want to save all your receipts in case of an audit. Some deductible expenses include:

  • Charitable contributions (up to a certain extent of your income)
  • Mortgage interest (up to $1 million in debt on up to two homes, or $750,000 for homes purchased after December 15, 2017)
  • Medical expenses exceeding 7.5% of your AGI
  • State and local taxes (up to $10,000 for property taxes, plus income and sales taxes)

Now, your AGI should drop substantially – at least by $12,200 (for singles taking the standard deduction, and more for other filers).

The amount of taxes you have to pay by April 15 (July 15 in 2020) is based on this number.

But we aren’t finished yet. Tax credits can further help reduce the amount you owe or, in some cases, increase the amount of your tax refund.

Special Tip for Independent Contractors

Independent contractors should file quarterly estimated taxes to lower their potential tax bill and avoid penalties.

Calculating Tax Credits

Unlike deductions from your gross income, tax credits come directly off the amount of taxes you owe. Let’s say, using the example above, you have a $1,000 tax bill.

If you qualify for any number of Federal income tax credits, you could end up owing nothing – or even get a refund.

Refundable tax credits, such as the Earned Income Tax Credit, put money in your pocket, even if the credit exceeds your tax bill or you are getting a refund.

Non-refundable credits, on the other hand, can lower your tax bill down to zero but will not count toward a tax refund.

Other common credits include:

  • Child and Dependent Care Credit
  • Child Tax Credit
  • Residential Energy Efficiency Credit
  • Health Coverage Tax Credit
  • American Opportunity and Lifetime Learning Credit

Will You Pay or Get a Refund?

Fortunately, American workers pay taxes all year directly from their paycheck. These “withholding taxes” go toward your Federal tax bill. So, if you’ve had $30,000 in Federal income tax deducted from your paycheck throughout the year, but owed $31,000 based on your AGI, you owe the IRS $1,000.

If you paid $31,000 in taxes and only owed $30,000, you would receive a $1,000 tax refund. Remember, refundable tax credits can increase the amount of your refund, but nonrefundable credits can only reduce your tax liability.

Paying Federal Income Taxes

After deductions and credits, you may still owe money in taxes. Although 73.2 percent of Americans received a refund in 2019, that still leaves more than one-quarter of Americans who either broke even or owed the IRS.

If you find yourself facing a tax bill, don’t wait to file. Even if you don’t have the money to pay your tax bill in full, file your Federal Income Tax forms on time. If you don’t file on time, you could face an IRS penalty of 5% of your tax bill per month for each month they’re late, up to 25%.

On the other hand, if you file but can’t pay, you’ll accrue penalties at a rate of just .05% per month.

If you qualify, however, you may get an extension of up to six months to pay – as long as you file your taxes on time. You will have to pay interest on the unpaid taxes at a rate of 3% annually.

Most importantly, the IRS has programs in place to help taxpayers facing unpaid tax debt. It may be difficult and scary to negotiate with the IRS on your own, however.

Solvable is here to help by connecting you with tax debt relief firms that will negotiate with the IRS on your behalf to reduce your tax bill or give you more time to pay.

Take a look at our reviews to find the best tax debt relief company to assist you on your journey to becoming tax debt-free.