Calculate US Federal Income Tax (10/12/22/24/32/35/37% brackets), UK Income Tax, or your own custom progressive brackets. See marginal rate, effective rate, and take-home pay.
Three tabs: US Federal (filing status: Single, MFJ, MFS, HoH), UK (£12,570 personal allowance with £100k taper, 20/40/45% bands), and Custom (define your own bracket schedule). Shows total tax, per-bracket breakdown, effective vs marginal rate, and net take-home.
Disclaimer: Federal only — state income tax, FICA (Social Security/Medicare), and local taxes are not included. Rates may change with new legislation. Consult a CPA for filing.
Calculator information
📋 How to use this calculator
- Select jurisdiction: US Federal (IRS brackets), state-level, UK, or custom brackets.
- Enter annual gross income before any deductions.
- Choose filing status: Single, Married Filing Jointly, Married Filing Separately, or Head of Household.
- Add deductible amounts: standard deduction or itemized deductions, 401(k) contributions, HSA contributions, and other above-the-line adjustments.
- For self-employed or small business owners, account for self-employment tax (15.3%) and qualified business income (QBI) deduction.
- Calculate effective tax rate by dividing total tax by gross income.
- Compare against marginal rate (top bracket applied) for tax planning decisions.
🧮 US Federal Individual Income Tax (IRS brackets, 2025)
Tax = sum(taxable_income_in_bracket_i x rate_i) across all brackets reached
- Taxable Income = Gross Income - Adjustments - Standard or Itemized Deduction
- Bracket 1 (Single): $0 - $11,925 = 10%
- Bracket 2: $11,926 - $48,475 = 12%
- Bracket 3: $48,476 - $103,350 = 22%
- Bracket 4: $103,351 - $197,300 = 24%
- Bracket 5: $197,301 - $250,525 = 32%
- Bracket 6: $250,526 - $626,350 = 35%
- Bracket 7: Over $626,350 = 37%
Standard deduction 2025: Single $15,000, MFJ $30,000, HoH $22,500. Long-term capital gains and qualified dividends taxed at preferential 0%/15%/20% rates. State income tax varies by state (0% in TX, FL, WA; up to 13.3% in CA).
💡 Worked example: Married couple filing jointly, $150,000 gross household income
Given:- Annual gross income: $150,000
- Filing status: Married Filing Jointly
- Standard deduction: $30,000
- 401(k) pre-tax contributions: $15,000
- HSA contribution: $4,300
Steps:- Adjustments: $15,000 (401k) + $4,300 (HSA) = $19,300.
- Adjusted Gross Income (AGI) = $150,000 - $19,300 = $130,700.
- Taxable Income = $130,700 - $30,000 = $100,700.
- Bracket 1 (MFJ): $23,850 x 10% = $2,385.
- Bracket 2: ($96,950 - $23,850) x 12% = $73,100 x 12% = $8,772.
- Bracket 3: ($100,700 - $96,950) x 22% = $3,750 x 22% = $825.
- Total Federal Tax = $2,385 + $8,772 + $825 = $11,982.
- Effective rate = $11,982 / $150,000 = 7.99%; marginal rate = 22%.
Result: Federal income tax owed is approximately $11,982, an effective rate of 7.99%. Each additional $1 of income up to $206,700 taxable income is taxed at 22% marginal. Consider maxing out 401(k) ($23,500 limit in 2025) and IRA to reduce taxable income further.
❓ Frequently asked questions
What is the difference between effective and marginal tax rate?
The effective rate is total tax divided by total income, reflecting your average tax burden. The marginal rate is the highest bracket applied to your next dollar of income. For example, with $100,000 taxable income filing single: effective rate around 14%, marginal rate 22%. For decisions about overtime or side income, use the marginal rate because that is what applies to additional earnings.
Do all US employees need to file a tax return?
Filing is required if income exceeds the standard deduction threshold (about $15,000 for single filers under 65 in 2025). Even if all income was withheld through W-2, you must still file Form 1040 by April 15 to claim refunds or reconcile credits. Self-employed individuals must file if net earnings are $400 or more. Penalties for not filing range from 5% per month up to 25% of unpaid tax, plus interest.
What is the Qualified Business Income (QBI) deduction?
Section 199A allows pass-through business owners (sole proprietorships, partnerships, S-corps, LLCs) to deduct up to 20% of qualified business income. For 2025, the full deduction phases out at taxable income above $241,950 (single) or $483,900 (MFJ) for specified service trades. The deduction is taken below the line and reduces taxable income but not AGI or self-employment tax.
How are taxes handled for freelancers and digital nomads?
Self-employed freelancers report income on Schedule C and pay self-employment tax (15.3% covering Social Security and Medicare) plus regular income tax. Quarterly estimated payments (Form 1040-ES) are required if you expect to owe more than $1,000. US citizens abroad still owe federal tax on worldwide income but may exclude up to $130,000 of foreign earned income (FEIE) for 2025 under Form 2555 if they meet the physical presence or bona fide residence test.
What are legal strategies to reduce income tax?
Five common strategies: (1) Max out tax-advantaged accounts (401(k), traditional IRA, HSA, FSA); (2) Itemize deductions if mortgage interest, SALT (capped at $10,000), and charitable donations exceed standard deduction; (3) Harvest capital losses to offset gains up to $3,000 against ordinary income; (4) Use S-corp election for self-employed to reduce SE tax; (5) Contribute to a 529 plan for state tax deductions. Avoid aggressive schemes without a CPA - IRS penalties for fraud can be severe.
📚 Sources & references
Last updated: May 11, 2026