About this calculator
Most people misunderstand the bracket system, believing one more dollar puts their entire income into a higher rate. It does not. Brackets apply progressively: only income above each threshold is taxed at the higher rate.
How it works
Your marginal rate is the rate on your last dollar, and it governs decisions about a raise, a bonus, or a side project. Your effective rate, total tax divided by total income, is always lower and describes your overall burden.
Frequently asked questions
What tax bracket am I in?
Your bracket is set by taxable income, which is adjusted gross income minus the standard deduction. Enter that figure here to see the rate applied to your last dollar.
Am I in a higher bracket if I get a raise?
You move into a higher bracket, but only income above the threshold is taxed at the new rate. Everyone fears the bracket cliff, but the actual effect on a moderate raise is small.
What is the difference between marginal and effective tax rate?
The marginal rate is the rate on your last dollar, and it decides whether a raise is worth taking. The effective rate is total tax divided by total income, and is always lower.
What counts as taxable income?
Taxable income is adjusted gross income minus the standard deduction, plus or minus certain other adjustments. It is the figure that goes into the bracket table on Form 1040.
Does the standard deduction move me to a lower bracket?
Yes, and this surprises people. Deductions reduce taxable income, so a large deduction such as business expenses or a retirement contribution can lower your bracket without lowering gross pay.
How do I move into a lower bracket?
Increase deductions: contribute to a retirement account, use the standard versus itemized deduction, or run a business that generates deductible expenses such as a home office.