How US federal income tax works
The US uses a progressive bracket system. Your income is reduced by your deduction (standard or itemized) to get taxable income, then each slice is taxed at its bracket rate. Because only the income inside each band is taxed at that rate, your effective rate is well below your top bracket.
2025 standard deduction
- Single — $15,750
- Married filing jointly — $31,500
- Married filing separately — $15,750
- Head of household — $23,625
FICA payroll taxes
On top of income tax, employees pay Social Security at 6.2% on wages up to the $176,100 (2025) cap, and Medicare at 1.45% on all wages. High earners pay an Additional Medicare Tax of 0.9% on wages above $200,000 (single) or $250,000 (married filing jointly). This calculator includes all three so your take-home figure is realistic.
What this estimate excludes
- State and local income taxes
- Tax credits such as the Child Tax Credit and the Earned Income Tax Credit
- Capital-gains and qualified-dividend special rates
- Above-the-line adjustments beyond your chosen deduction
Frequently asked questions
What are the 2025 federal tax brackets?
For 2025 the seven rates are 10%, 12%, 22%, 24%, 32%, 35% and 37%. The income each rate applies to depends on your filing status — single, married filing jointly, married filing separately, or head of household. Only the income within each band is taxed at that band's rate.
What is the 2025 standard deduction?
Following the One Big Beautiful Bill Act, the 2025 standard deduction is $15,750 for single and married-filing-separately filers, $31,500 for married filing jointly, and $23,625 for head of household.
What is FICA and is it included?
FICA is the payroll tax for Social Security (6.2% on wages up to the $176,100 cap) and Medicare (1.45% on all wages, plus an extra 0.9% above $200,000 single / $250,000 joint). This calculator adds FICA so you see your true take-home pay.
Does this include state income tax?
No. This estimates federal income tax and FICA only. State and local income taxes vary widely and are not included, so your actual take-home in a high-tax state will be lower.
What is the difference between marginal and effective rate?
Your marginal rate is the bracket your last dollar falls in. Your effective rate is total tax divided by gross income — always lower, because your earlier income is taxed at the lower brackets first.
Tax year 2025 figures reflecting the One Big Beautiful Bill Act. Estimates for informational purposes only and not tax advice — verify with the IRS or a tax professional.