US Income Tax Calculator

What is US Federal Income Tax?

US Federal Income Tax is a tax levied by the United States Internal Revenue Service (IRS) on the annual earnings of individuals, corporations, trusts, and other legal entities. It operates on a progressive tax system, meaning that the tax rate increases as the taxable amount increases.

The US Federal Income Tax Formula

The calculation of federal income tax involves several steps:

1. Calculate taxable income: \[TaxableIncome = TotalIncome - Deductions\]
2. Apply tax rates to each bracket of taxable income
3. Sum up the tax from each bracket: \[TotalTax = \sum (BracketIncome \times BracketRate)\]

Where:

• TotalIncome is your gross income for the year
• Deductions include standard or itemized deductions
• BracketIncome is the portion of your income that falls within each tax bracket
• BracketRate is the tax rate for each bracket

Step-by-Step Tax Calculation

1. Determine your filing status (single, married filing jointly, head of household)
2. Calculate your taxable income by subtracting deductions from your total income
3. Identify the tax brackets that apply to your filing status
4. Calculate the tax for each bracket your income falls into
5. Sum up the tax from each bracket to get your total federal income tax
6. Calculate your effective tax rate by dividing total tax by total income

Example Calculation

Let's calculate the federal income tax for a single filer with an annual income of $75,000 and standard deduction of $12,550 (2021 tax year):

1. Taxable income: $75,000 - $12,550 = $62,450
2. Apply tax rates:
   • 10% on the first $9,950: $995
   • 12% on $9,951 to $40,525: $3,669
   • 22% on $40,526 to $62,450: $4,823.50
3. Total tax: $995 + $3,669 + $4,823.50 = $9,487.50
4. Effective tax rate: ($9,487.50 / $75,000) × 100% = 12.65%

Visual Representation

The blue portion of the bar represents the effective federal income tax rate (12.65%) for the given income in this example.