How this is calculated
The calculator follows the same order as a federal return, without the forms:
1. Payroll taxes come off wages first: 6.2% Social Security up to the $184,500 wage base, 1.45% Medicare on everything, plus 0.9% Additional Medicare above $200,000 ($250,000 joint). Self-employment income pays both halves — 15.3% on 92.35% of net earnings — with half of that deductible.
2. Adjusted gross income adds every income type — wages, self-employment, interest, dividends, capital gains, other — minus pre-tax contributions and half of self-employment tax.
3. Deductions: the 2026 standard deduction ($16,100 single / $32,200 joint) or your itemized total if larger, plus every deduction that stacks on top: the extra deduction at 65+ and the $6,000 senior bonus, the new tips deduction (up to $25,000), overtime-premium deduction (up to $12,500 / $25,000), car-loan interest (up to $10,000), charity for non-itemizers ($1,000 / $2,000), student-loan interest (up to $2,500, above the line), and the 20% QBI deduction for business owners. Each phases out at the income levels its card shows — and the tips, overtime, car-loan and senior-bonus deductions all expire after 2028 unless Congress extends them.
4. Two tax ladders: ordinary income climbs the 10–37% brackets; qualified dividends and long-term gains stack on top at the gentler 0/15/20% rates. High investment income adds the 3.8% net investment income tax.
5. Credits: the $2,200-per-child tax credit, phasing out above $200,000 ($400,000 joint).
6. State & local: your state's 2026 rates applied to AGI, plus NYC brackets or the county/municipal rates where they exist.
Location is a tax decision — but not the one the headlines sell
"No income tax" states are never free; they collect differently. Texas skips the income tax and takes it back through some of the country's highest property-tax rates; Tennessee leans on a ~9.5% combined sales tax; Washington adds a capital-gains excise. Meanwhile a "high-tax" state can be cheaper for a renter with modest spending than a "no-tax" state is for a homeowner. The only honest comparison is all three big taxes at once — income, property, and sales — on your own numbers, which is exactly what the "compare a second state" option above computes. Two more things headline lists omit: local layers (NYC's city tax, Ohio municipalities, Maryland counties) can exceed some states' entire income tax, and moving mid-year usually means filing part-year returns in both states.
What "Not sure" does
Every "Not sure" answer picks the assumption that's true for most people and says so under the question — for example, the standard deduction instead of itemizing. You get a solid estimate from day one and can sharpen it as you learn the answers.
Honest limits
This is a planning estimate, not a filing. State taxable income is approximated from federal AGI (state-specific deductions, exemptions and credits aren't modeled — most states' would lower the state figure somewhat). Not modeled: AMT, EITC, education or energy credits, capital-loss netting, state disability/paid-leave payroll taxes, and Washington's capital-gains excise. Withholding on your actual paycheck may differ from true liability — this estimates the liability.