How US Income Tax Works
Understanding how US income tax is calculated helps with financial planning, salary negotiations, and ensuring you're not over- or under-withholding. This estimator breaks down the main components of federal and state taxes.
The Components of US Income Tax
Your total tax burden typically includes:
1. Federal Income Tax
Progressive tax brackets mean higher income is taxed at higher rates. For 2024 (Single filers):
- 10% on income up to $11,600
- 12% on income $11,601 - $47,150
- 22% on income $47,151 - $100,525
- 24% on income $100,526 - $191,950
- 32% on income $191,951 - $243,725
- 35% on income $243,726 - $609,350
- 37% on income over $609,350
Note: These are taxable income amounts after standard/itemized deductions.
2. FICA Taxes (Social Security + Medicare)
- Social Security: 6.2% on income up to $176,100 (2025 wage base)
- Medicare: 1.45% on all earned income
- Additional Medicare Tax: 0.9% on income over $200,000 (single) or $250,000 (married)
Total FICA = 7.65% for most earners (6.2% + 1.45%).
3. State Income Tax
State rates vary widely: California ~9-12%, New York ~4-10%, Texas/Florida/Washington = 0%. Some states have flat rates, others progressive brackets. Check your specific state.
How the Estimator Works
This calculator:
- Subtracts standard deduction based on filing status from gross income
- Applies federal tax brackets to calculate progressive tax
- Adds Social Security (capped at wage base) and Medicare taxes
- Applies state tax rate you provide
- Shows effective tax rate (total tax ÷ gross income)
Example Calculation
Single filer, $75,000 gross, California (9% state), no pre-tax deductions:
- Federal (after $14,600 deduction): ~$7,600
- Social Security: $4,468 (6.2% of $72,076 after SS cap not reached)
- Medicare: $1,088 (1.45%)
- State: $5,433 (9%)
- Total deductions: ~$18,589
- Effective rate: 24.8%
- Take home: ~$56,411
Related Tools
For more comprehensive financial planning:
- Use our Take Home Pay Calculator to include deductions and different pay frequencies
- Calculate hourly to annual salary with overtime considerations
- Compare salary vs hourly employment types tax implications
This estimator uses simplified calculations based on 2024 tax brackets. For precise tax planning, consult the IRS Publication 15 or a tax professional.