See exactly where every dollar of your paycheck goes. Federal, state, Social Security, Medicare — all in one place.
Using 2026 federal brackets, standard deductions, and FICA caps
Fill in your details and click "Calculate" to see your complete tax breakdown
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The US uses a progressive tax system, which means your income is divided into "brackets" and each bracket is taxed at a different rate. This is one of the most misunderstood aspects of the tax system — many people believe that moving into a higher tax bracket means all their income is taxed at that higher rate. This is incorrect.
For example, if you're a single filer earning $100,000 in 2026, your tax is NOT simply 22% × $100,000 = $22,000. Instead, it's calculated as:
Total federal tax: $13,170, which is an effective rate of just 13.2% — not 22%.
The One Big Beautiful Bill Act (OBBBA), passed in 2025, brought several changes to the tax code. The 2026 standard deductions have been adjusted for inflation:
Additionally, seniors age 65 and older receive a $4,000 bonus deduction under the new provisions.
The OBBBA introduced several new tax benefits designed to help working Americans:
Starting in 2026, tip income is exempt from federal income tax. This is a major benefit for restaurant workers, bartenders, hotel staff, and others in tipped industries. While you still pay FICA taxes on tips (for Social Security and Medicare), the income tax exemption can save tipped workers thousands of dollars per year.
Overtime pay is now deductible from federal taxable income. This means if you earn $10,000 in overtime, you can deduct that from your income before calculating federal tax. You still pay FICA on overtime, but the income tax savings can be significant for workers putting in extra hours.
While federal taxes get most of the attention, state income tax can significantly impact your take-home pay. The difference between living in a high-tax state like California (up to 13.3%) versus a no-tax state like Texas or Florida can mean thousands of dollars per year.
Nine states have no income tax: Alaska, Florida, Nevada, New Hampshire (dividends/interest only), South Dakota, Tennessee, Texas, Washington, and Wyoming. If you're considering relocating or working remotely, use our state comparison tool to see exactly how much you'd save.
Self-employed individuals (1099 contractors) face a significant tax disadvantage: the self-employment tax. As a W-2 employee, you pay 7.65% of your income for Social Security and Medicare, and your employer pays a matching 7.65%. As a self-employed person, you pay both halves — a total of 15.3%.
This means that to have the same take-home pay as a W-2 employee, you need to charge approximately 7-8% more as a contractor. Our calculator includes a W-2 vs 1099 comparison to help you understand this difference.
There are several legal strategies to reduce your tax burden: