Income Tax Calculator
Estimate your federal income tax, refund, and effective tax rate for the 2025 tax year
Filing Information
Income
Deductions & Credits
Max $10,000 for qualified vehicle purchase
Max $2,500/Person
Max $3,000/Person, $6,000 total, up to age 13
Tax Summary
Gross Income
$80,000
Federal Tax Liability
$9,049
Take-Home Income
$70,951
Effective Tax Rate
11.31%
Income Tax Calculator Help
What is a tax bracket and how does it work?
Tax brackets are ranges of income taxed at progressively higher rates. The U.S. uses a progressive tax system, meaning you do not pay one flat rate on all income. Instead, different portions of your income are taxed at different rates. For example, as a single filer in 2025, the first $11,600 of income is taxed at 10%, the next $35,550 is taxed at 12%, and so on. You only pay the higher rate on income that falls into that bracket, not on all your income.
What is the difference between the standard and itemized deduction?
The standard deduction is a fixed amount ($15,000 for single filers in 2025) that reduces your taxable income automatically. The itemized deduction allows you to deduct specific expenses like mortgage interest, property taxes, and charitable donations. The IRS allows you to claim whichever is larger. Most taxpayers use the standard deduction because it is simpler and results in greater tax savings.
What are tax credits and how do they differ from deductions?
Tax credits directly reduce the amount of tax you owe, dollar for dollar. For example, a $1,000 tax credit reduces your tax bill by exactly $1,000. Deductions, on the other hand, reduce your taxable income. A $1,000 deduction might only save you $240 in taxes (depending on your tax bracket). This makes credits more valuable than deductions of the same amount.
How do capital gains affect my taxes?
Capital gains are profits from selling investments or property. Short-term capital gains (held less than 1 year) are taxed as ordinary income at your regular tax bracket rate. Long-term capital gains (held over 1 year) are taxed at preferential rates of 0%, 15%, or 20%, depending on your income level. This calculator treats capital gains as ordinary income for simplicity; consult a tax professional for accurate long-term capital gains calculations.
What is an effective tax rate?
Your effective tax rate is the average percentage of your total income paid in taxes. It is calculated by dividing your total tax liability by your gross income and multiplying by 100. For example, if you earn $100,000 and owe $18,000 in taxes, your effective tax rate is 18%. This is different from your marginal tax rate, which is the rate applied to your last dollar of income.
How do child tax credits work?
The Child Tax Credit allows you to claim up to $2,200 per qualifying child under age 17. This is a refundable credit, meaning if the credit exceeds your tax liability, you may receive a refund. To qualify, the child must be a U.S. citizen or resident alien with a valid Social Security Number. The credit begins to phase out for high-income earners ($200,000 for single filers, $400,000 for joint filers).
Pro Tips
- • Maximize retirement contributions (401k, IRA) to reduce your taxable income. In 2025, you can contribute up to $24,000 to a 401k and $7,000 to a traditional IRA.
- • Keep records of charitable donations, medical expenses, and business expenses. These can significantly reduce your tax burden if you itemize deductions.
- • Consider tax-loss harvesting by selling losing investments to offset capital gains. This can reduce your overall tax liability.
- • If you are self-employed, you can deduct business expenses including home office, equipment, and vehicle mileage (standard rate: 67 cents/mile in 2025).
- • Adjust your W-4 withholdings to match your actual tax liability. Over-withholding gives the government an interest-free loan; under-withholding may result in penalties.
- • Married couples filing jointly often have lower effective tax rates. Compare filing jointly vs. separately to determine which is more beneficial for your situation.