Question 1

How is federal income tax calculated?

Accepted Answer

The US uses a progressive tax bracket system. Your income is divided into brackets, and each portion is taxed at the rate for that bracket. For 2026, the brackets are 10%, 12%, 22%, 24%, 32%, 35%, and 37% depending on filing status.

Question 2

What is FICA tax?

Accepted Answer

FICA stands for Federal Insurance Contributions Act and includes Social Security (6.2%) and Medicare (1.45%). Employers match these amounts. High earners pay an additional 0.9% Medicare surtax on wages over $200,000 (single) or $250,000 (married).

Question 3

What is the difference between marginal and effective tax rate?

Accepted Answer

The marginal tax rate is the rate you pay on your last dollar of income. The effective tax rate is your total tax divided by your total income, which is always lower because earlier dollars are taxed at lower rates.

Question 4

Does this calculator include state taxes?

Accepted Answer

No, this calculator shows federal income tax and FICA only. State income tax varies widely — some states like Texas, Florida, and Washington have no state income tax, while California and New York can add 5-13%.

Question 5

What is the standard deduction for 2026?

Accepted Answer

The 2026 standard deduction is $15,750 for single filers, $23,625 for head of household, and $31,500 for married filing jointly. This tool uses these figures automatically.