Income Tax Calculator

The United States uses a progressive tax system with seven federal income tax brackets ranging from 10% to 37%. Only the income that falls within each bracket is taxed at that rate, not your entire income. For example, a single filer earning $60,000 in 2024 pays 10% on the first $11,600, 12% on income from $11,601 to $47,150, and 22% on the remainder, resulting in an effective rate well below 22%.

Every taxpayer can choose between the standard deduction and itemizing deductions. For 2024, the standard deduction is $14,600 for single filers and $29,200 for married couples filing jointly. Itemizing makes sense only when your qualifying expenses, such as mortgage interest, state and local taxes (capped at $10,000), and charitable contributions, exceed the standard deduction. Roughly 90% of taxpayers benefit from taking the standard deduction.

State income tax rates and structures vary widely across the country. Nine states, including Texas, Florida, and Nevada, charge no state income tax at all. Others, like California, impose rates as high as 13.3% on top earners. Some states use a flat tax rate while others have progressive brackets similar to the federal system. Your state of residence can have a significant impact on your overall tax burden.

Several strategies can legally lower the amount of income tax you owe. Contributing to tax-deferred accounts like a 401(k) or traditional IRA reduces your taxable income dollar for dollar, up to annual limits. Health Savings Accounts (HSAs) offer a triple tax advantage: deductible contributions, tax-free growth, and tax-free withdrawals for medical expenses. Timing capital gains and harvesting investment losses can also reduce your tax bill in a given year.