Income Tax Calculator 2023 and 2024
This Page Was Last Updated: October 17, 2024
What You Should Know
- This Income Tax Calculator helps you estimate your federal, state and FICA income tax based on your salary and deductions available in your state.
- Federal Income Tax and FICA tax is levied in all states for all workers, while State Income Tax is only charged in the relevant state.
- Some states do not have income tax, but the state residents still have to pay Federal Income Tax.
Federal Income Tax Rates
Federal, state, and local governments in the United States can levy an income tax on the applicable residents. Federal income tax must be paid in all states, even those that do not levy an income tax on their residents.
The Federal income tax is usually the largest part of the combined income tax. In 2024, the top bracket for the Federal income tax was 37%, and it was charged on income over $609,350 for single filers and heads of household, $731,200 for married filing jointly, and $365,600 for married filing separately.
Federal Income Tax Rates By Year
Federal Income Tax Brackets for 2024
| Standard Deduction | Single Filer | Married Filing Jointly | Married Filing Separately | Head of Household |
|---|---|---|---|---|
| Amount | $14,600 | $29,200 | $14,600 | $21,900 |
| Tax Rate | Single Filer | Married Filing Jointly | Married Filing Separately | Head of Household |
| 10% | $0 - $11,600 | $0 - $23,200 | $0 - $11,600 | $0 - $16,550 |
| 12% | $11,600 - $47,150 | $23,200 - $94,300 | $11,600 - $47,150 | $16,550 - $63,100 |
| 22% | $47,150 - $100,525 | $94,300 - $201,050 | $47,150 - $100,525 | $63,100 - $100,500 |
| 24% | $100,525 - $191,950 | $201,050 - $383,900 | $100,525 - $191,950 | $100,500 - $191,950 |
| 32% | $191,950 - $243,725 | $383,900 - $487,450 | $191,950 - $243,725 | $191,950 - $243,700 |
| 35% | $243,725 - $609,350 | $487,450 - $731,200 | $243,725 - $365,600 | $243,700 - $609,350 |
| 37% | From $609,350 | From $731,200 | From $365,600 | From $609,350 |
State Income Tax Rates
Some states choose to impose their own income tax on their residents. Depending on the state and income, the tax rates can be as low as 0% and as high as 15%. Usually, these tax rates are progressive like the Federal income tax, but they can also be flat. The progressive income tax rate increases as the income increases while the flat income tax rate stays the same. You can find your State’s tax rate in the map below.
Top Individual Income Tax Rates by State 2024
There are also 9 states with no state income tax. The residents of these states still have to pay federal income tax, but their state income tax is effectively 0%. The following table shows the states with 0% income tax rates.
States With No Income Tax
| Alaska | New Hampshire | Texas |
| Florida | South Dakota | Washington |
| Nevada | Tennessee | Wyoming |
How to Calculate Income Tax
Income tax is one of the most significant taxes a US resident may have to pay. Understanding how to calculate your income tax may help you save a lot of money and increase your budget. The savings come from adjustments and deductions available to residents who may not know about them. Before estimating your income tax, you should find your taxable base. The income tax calculator above can help you estimate your taxable income.
How to Calculate Taxable Income
It is important to understand the difference between adjusted gross income and taxable income because they are used in different ways. Adjusted gross income is usually used as a taxable base for state and local income tax. Taxable income is usually used for federal income tax.
Adjusted Gross Income: Your adjusted gross income is the portion of your gross income that is subject to state and local taxation. It is calculated by adding all of your taxable income sources and subtracting any “above-the-line” adjustments.
Taxable Income: It is the portion of your adjusted gross income that is subject to federal income tax. It is usually smaller than the adjusted gross income because it subtracts standard or itemized deductions allowed for federal income tax.
Once you find your taxable income, you can find how much you owe in income tax. To find your income tax, you have to allocate all of your income into the tax brackets and find how much you owe in each bracket. Income tax is progressive, so you may have a lower tax rate for $70,000 income and a higher tax rate for $120,000 income.
Income Tax Deductions
Tax deductions are eligible amounts that you can use to reduce your taxable income. When you pay state taxes, you may have access to a standard deduction if your state allows it. When filing your federal taxes, you can choose to use a standard deduction or an itemized deduction. To get the maximum benefit from your tax deduction, you should calculate both your standard and itemized deductions, then use the larger one.
Standard Deduction
A standard deduction is a flat dollar amount you can deduct from your adjusted gross income (state) or taxable income (federal). By reporting a smaller income, you can pay less tax on that income.
The standard state tax deduction is the only deduction you can make on your state taxes. There are 32 states with a standard deduction. State tax deductions are only applied to your adjusted gross income to calculate your state taxes; so state taxes are applied to your adjusted gross income minus state tax deductions. You cannot use the state tax deduction to calculate your taxable income (federal level) but in many cases, the state tax deduction is the same as the federal tax deduction.
The standard federal tax deduction is used by most taxpayers because it is very simple to calculate. The standard deduction is also very generous because of the Tax Cuts and Jobs Act (TCJA). In many cases, a standard deduction is more beneficial than an itemized deduction.
| Filing Status | Standard Deduction for 2023 | Standard Deduction for 2024 |
|---|---|---|
| Single Filer | $13,850 | $14,600 |
| Married Filing Separately | $13,850 | $14,600 |
| Married or Qualified Widow(er) | $27,700 | $29,200 |
| Head of Household | $20,800 | $21,900 |
| Senior (Age 65+) or Blind | Add $1,500 for Married or $1,850 for Single or Head of Household. | Add $1,550 for Married or $1,950 for Single or Head of Household. |
Itemized Deduction
The itemized deduction is a tax deduction calculated using specific tax-deductible expenses. Calculating this deduction is much more complicated because you must find all eligible deductions and fill out a Schedule A. However, in some cases, you could end up saving more than you would with a standard deduction. These deductions are split into 6 categories:
- Medical and dental expenses
- State and local taxes (Maximum $10,000)
- Interest expenses (Eg. Mortgage interest)
- Charitable Donations
- Casualty or theft losses
- Other deductions include gambling losses, unrecoverable pension investments, etc.
The home mortgage interest deduction lets you deduct the cost of mortgage interest if you choose to itemize your deductions. This can partially offset the interest costs of your mortgage. Property taxes are also usually tax deductible, but transfer taxes are not deductible.
Taxable Sources And Adjustments
Understanding what is considered taxable income sources, what adjustments are available, and what deductions can be used to the gross income may help you save a lot of money. Most sources of income are taxable, but it is important to understand what you do not have to include in your gross income before filing your taxes. Understanding tax adjustments can help you save money on the expenses you have encountered over the tax year. Deductions can further lower your tax liability if you are eligible for them.
Taxable Income Sources
Salary and wages include much more than people realize. This is by far the largest category when it comes to income taxes and covers any “official” income received through an organization or business. Your employer should provide you with a Form W-2 or Wage and Tax Statement that displays all your income and withholding information. This must be included on your tax return and your partner’s tax return when filing jointly. Salary and Wages include a large variety of different sources of income, but generally, if you receive money, the IRS considers it taxable income. The main sources of income are:
- Wages
- Pension income
- Annuities
- Gratuities
- Fees
- Commissions
- Profits
- Leave encashment
- Income from recognized provident funds (foreign pension funds)
- Contributions to employee pension accounts
There are also alternative sources of income that can include:
- Royalties
- Gifts
- Winnings from lotteries, gambling, races, game shows, etc.
Typically, these sources of income only happen sporadically, but they are taxable. Alternative sources of income are taxed as well. This can include:
- Income from rental properties
- Profit from a business or profession
- Capital gains on the sale of any capital assets
If you receive money, then chances are it is taxable and you should report it to the IRS.
While you may be under the perception that tips, cash or non-cash, received are non-taxable, the IRS considers tips to be taxable as well. Most often made in the food industry, tips are a large source of income for waiters and waitresses. Your base salary or wage is automatically taxed and your employer will withhold funds that are sent to the IRS. However, it is very difficult for managers to track tips, so you are responsible for reporting your tips to your employer for tax purposes. You can use Form 4070 and your employer will withhold money from your wages to pay taxes. Tips must be reported if they are cash tips of more than $20 per month, any non-cash tips, or tips gained through tip-sharing arrangements like tip pools. The only case where you don’t have to report tips to your manager is if you do not receive $20 in tips for the month per job, but this still must be included on your income tax return.
Interest income is reported on Form 1099-INT or Form 1099-OID and these figures must be included on your federal income tax return even if you do not receive the forms. Nearly all forms of interest income are considered earned income and are taxed normally. This includes interest earned on:
- Deposit accounts
- Account opening gifts
- Loans
- Certificates of deposit
- U.S. bonds (including municipal bonds)
- Insurance dividends or prepaid insurance gains
- Annuity contracts
- Original issue discounts on long-term debt
- Income tax refunds
The IRS also considers dividends received on accounts with credit unions, cooperative banks, and other banking institutions as interest income. Of possible sources of interest income, it is only exempt if the source of interest came from municipal bonds, private activity bonds, or exempt-interest dividends from a mutual fund or other investment company.
Dividends can be taxed as either qualified dividends or nonqualified dividends. Qualified dividends are taxed at a lower rate and include dividends from U.S. companies, U.S.-possessed companies, foreign companies eligible for benefits as part of a U.S. tax treaty, or a company’s stock that is widely available through a major U.S. stock exchange. Additionally, there are holding period requirements that require stock owners to hold the stock for a certain amount of time before receiving the dividend. If the dividend is unqualified, it will be taxed as regular income at the individual’s regular income tax rate.
When you receive alimony payments, you are receiving income, but the IRS does not consider alimony received as part of your gross income. Under previous legislation, if you receive alimony, you would have to pay income taxes. Fortunately, the Tax Cuts and Jobs Act (TCJA) made it so that any alimony received from a divorce finalized on or after January 1, 2019, is not taxed. This includes any divorce agreements modified during this period.
According to the IRS, “Most retirement plan distributions are subject to income tax and may be subject to an additional 10% tax.” You only need to pay this additional 10% tax if you withdraw money before you reach the age of 59.5 (exceptions exist). Otherwise, retirement distributions are considered regular income and must be filed on your tax return.
Unemployment compensation is considered taxable, but some rules may lessen your tax burden. If your adjusted gross income (AGI) is lower than $150,000, you can exclude up to $10,200 from your taxable income. Unemployment compensation considers any amounts received due to laws of the U.S. or laws of your state, which includes:
- State unemployment insurance benefits
- Benefits from the Federal Unemployment Trust Fund
- Railroad unemployment compensation benefits
- Trade readjustment allowances
- Unemployment assistance
- Federal Pandemic Unemployment Compensation (CARES)
- Benefits from a private fund that exceed any amount you voluntarily contributed to the fund
Social Security benefits are only taxable if you have other substantial sources of income as classified by the IRS like wages, self-employment, interest, dividends, etc.
- If you are required to pay this tax - You will be taxed on 85% of the benefits received
- If you file individually and make $25,000 - $34,000 - You pay income tax on 50% of the benefits received
- If you file jointly and make $32,000 - $44,000 - You pay income tax on 50% of the benefits received
Income Tax Adjustment
401(k) or IRA contributions: With a 401(k) or an IRA, your employee will withhold part of your salary and contribute to your retirement account directly. This means that any contributions to your 401(k) or Roth IRA are not included as part of your taxable income. This is not considered a deduction but rather is directly removed from your gross income. The IRS also offers employees who are saving for their retirement the Saver’s Tax Credit, which is a reduction of your income tax bill. When you make contributions to your 401(k) or IRA, the IRS will match 50%, 20%, or 10%, depending on your income, of the first $2,000 of your contribution as a tax credit, which directly reduces your tax bill. This amount stays at $2,000 for married couples filing jointly. In 2021, the maximum adjusted gross income (after deducting 401(k) or IRA contributions) to be eligible for this program is $66,000 for a married couple filing jointly, $49,500 for a head of household, and $33,000 for an individual or married couple filing separately.
Contributions to a health savings account: A Health Savings Account (HSA) is a specialized savings account for people meant only to cover qualified medical expenses. You must participate in a High-Deductible Health Plan (HDHP) to take advantage of an HSA. In 2021, the maximum contribution to an HSA is $3,600 for individuals or $7,200 for married couples filing jointly. There is also an additional $1,000 for taxpayers aged 55 or older as of the end of the tax year. Much like 401(k) or IRA contributions, HSA contributions are made before your income is considered for taxes, so it is a direct pretax deduction from your income (above-the-line).
- If you use an HSA to pay your medical bills, then you cannot use medical expenses as an itemized tax deduction.
- If you don’t use an HSA to pay your medical bills, you can use them as an itemized tax deduction only if your medical expenses exceed 7.5% of your adjusted gross income.
You can meet this threshold more easily by paying medical bills with your own money in addition to making HSA contributions to increase your eligible medical bills and decrease your AGI.
Charitable donations ($300 limit): If you make a cash contribution to an approved charitable organization, you can make an above-the-line deduction from your gross income of up to $300 as part of the CARES Act. While you can itemize charitable donations for up to 60% of your gross income, the above-the-line deduction can be done without itemizing your deductions. Your charitable donation must be for an approved purpose, which includes:
- Religious centers
- Charities
- Scientific organizations
- Literary, education
- Animal rights
- Amateur sports
There are many cases where you cannot use a charitable donation as an above-the-line deduction. This includes:
- Non-cash gifts
- Contributions to private foundations
- Donations to supporting organizations (or donor-advised funds)
- Donations to certain organizations (veterans’, fraternities, cemetery companies, burial companies, etc.)
- Contributions made in previous years
Self-employment income: In public companies, employees and employers are responsible for paying half of the total FICA tax each, but self-employed individuals need to pay this tax themselves (15.3%). Fortunately, the IRS allows half of this tax to be considered as “employer” paid, so you can deduct half of the total tax (7.65%) from your gross income. You can also deduct many expenses related to the operation of your business, including home office expenses, vehicle expenses, retirement contributions, education expenses, and interest on business-related loans.
Self-employed health insurance: Under self-employment, expenses related to dental, health, or long-term insurance premiums paid for by you can be tax-deductible given certain conditions. First, you must have positive earned income for the year, so you can’t deduct this expense from your taxes if your businesses generated a loss and you cannot deduct more than your generated income. Next, you must be either a partner or LLC member treated as a partner with a minimum of a 2% share. You are ineligible if you have the opportunity to enroll in another healthcare plan (Eg. under a spouse’s employer). You can also deduct health insurance premiums paid for your employees as part of a sole proprietorship or children under 27 years of age (both dependent and independent).
Jury duty income turned over to an employer: When participating on a jury, it is common for you to receive regular pay or paid leave. You may also receive payment from the court for your service. While both of these are considered part of your taxable income, employers who already pay their employees while on jury duty often require that earnings from the court are given to them. Fortunately, you can claim any amount given to your employer as an above-the-line deduction and reduce your gross income. While on jury duty, you may also receive an allowance for jury-related expenses like parking, transportation, or food. This amount is not considered part of your income and your employer cannot ask you to hand over this amount.
*Alimony Paid: Any alimony paid is still considered part of your gross income and is taxable. Under previous legislation, you could make an above-the-line adjustment for any alimony paid and directly deduct this amount from your gross income. However, the Tax Cuts and Jobs Act (TCJA) implemented new legislation that requires any alimony paid from a divorce finalized on or after January 1, 2019, to be reported as taxable income. This includes any divorce agreements modified after this date.
Qualified educator expenses: As a qualified educator, you are eligible to deduct up to $250 as an individual or $250 per spouse when married filing jointly from your taxable income as an above-the-line adjustment. According to the IRS, this includes any expenses related to the
Educators teaching health or physical education can make other deductions for athletic equipment. After March 12, 2020, any costs related to equipment or supplies used to prevent the spread of COVID-19 are eligible for deductions as well. To qualify, you must have been a teacher, instructor, counselor, principal, or aide for at least 900 hours per school year for an official elementary or secondary school for the grades K-12. If you receive interest excluded from your income, distributions from tuition programs, tax-free withdrawals from a Coverdell account, or unreported reimbursements (Form W-2), then you must offset any eligible qualified educator expenses by these amounts.
Early withdrawal penalties: If you incur early withdrawal penalties from a certificate of deposit (CD) or other time-deposit savings account, then you can deduct this amount from your taxable income as an above-the-line adjustment. CD’s have fixed terms, so to encourage individuals from pulling their money out before the CD matures, banks usually impose a set penalty on an early withdrawal. The total penalty amount will be reported on both your Form 1099-INT and Form 1099-OID.
Local Income Taxes
State Income Tax
The state income tax applies to any adjusted gross income earned within your state. Most states use a progressive tax rate. However, some states have a fixed tax rate (does not depend on your income) and some states have no state taxes at all.
States with no income tax are not always cheaper to live in. Every state government needs a source of revenue and taxes are their primary source of income. They use these funds for public services like road maintenance, law enforcement, and hospitals. If a state does not charge income taxes, it will probably make up for this deficit with higher sales, excise, or property taxes.
For an average resident, this means that the cost of living should remain the same. Of the states that do not charge a state income tax rate, their average sales tax rate is about 7%, which is over half a percent higher than the average of the remaining states.
No income tax has other implications for the well-being of residents as well. If the state government’s revenue is not made up elsewhere, public services may be worse, but government programs that help those in need are worse as well. Income taxes are used as a tool to redistribute wealth from those with an abundance of money to those who need it more.
Local Income Tax
Some counties will have an additional income tax that can be applied in many different ways. Only some municipalities within states have local income taxes, so you may be paying different taxes than someone even in the same state. If you belong to any of these 17 states, you may pay be required to pay a local income tax:
States With Local Income Taxes
| Alabama | Iowa | Missouri | Pennsylvania |
| California | Kansas | New Jersey | West Virginia |
| Colorado | Kentucky | New York | |
| Delaware | Maryland | Ohio | |
| Indiana | Michigan | Oregon |
All states listed above also charge a state income tax. For these states, the tax is split up at all three levels because local and state governments use income taxes as a source of revenue. Many local governments use property taxes as their largest source of income while state governments rely on income and sales taxes. Regardless of which level of government you pay income taxes to, your tax dollars are used to fund public services essential to your area.
FICA Tax
The Federal Insurance Contributions Act (FICA) is a U.S. law that combines the mandatory social security tax and medicare tax. The social security tax and medicare tax are marginally applied to your adjusted gross income. The social security tax is 6.2% on the first $137,700 of your gross income and 0% for any income above $137,700. The medicare tax is 1.45% on the first $200,000 and 2.35% for any income above $200,000.
For self-employment income, you can deduct half of the total FICA tax (7.65%) when you file your tax return. This is an above-the-line adjustment, which means it applies before your federal income tax deductions.
Certain individuals are eligible for FICA tax exemptions, which include:
- Students employed by their school, college, or university
- Foreign government employees
- International students, scholars, professors, teachers, researchers, physicians, au pairs, summer camp workers, and other aliens
- Certain religious groups (Eg. Amish) → You will be unable to receive Medicare and Social Security Benefits
Earned Income Tax Credits
Tax credits allow you to directly reduce your tax liability. For example, if you owe $500 in income taxes and have a $300 tax credit, you can reduce your income taxes to $200. The Earned Income Tax Credit (EITC) is a tax credit meant to help low-moderate-income workers and families. It is calculated as a fixed percentage of earnings that depends on your income. This tax credit has multiple requirements that include:
- Proof of earned income
- Investment income below $3,650 in the same tax year
- Valid Social Security Number
- Be one of married filing jointly, the head of household, a qualifying widow or widower, or single
- Be a U.S. citizen or resident alien for the full year
The amount you receive may change if you have children or dependents, are disabled, or meet other criteria. For more information, visit the IRS Earned Income Tax Credit (EITC) page.
Tax Refunds
You will receive a tax refund for overpaying taxes to the federal or state government during the following year. While many taxpayers are happy to receive a tax refund, the money was always yours and you simply gave your money to the government interest-free for some time. If you had submitted your taxes incorrectly, then you could have kept more of your original income and would not need a tax refund. In this case, you should make sure to fill out your Form W-4 correctly and update it regularly. Unfortunately, there are many cases where a tax refund is necessary such as when your actual annual income was lower than expected.
Tax refunds can be given to you in many forms like cheques, government bonds, direct deposits, etc. Generally, you should receive your tax refund within 21 days if your taxes were filed electronically and within 42 days if your taxes were filed on paper, however, there are exceptions where your refund may be delayed. If you owe a federal or state agency, your tax refund may also be used to repay the debt. However, in most cases, you should ensure that you file a federal tax refund and your tax refund is delivered to the correct address. Otherwise, you could lose your tax refund.
Income Tax Filing Status Options
In the U.S., there are five main tax filing statuses, each with its own eligibility criteria and tax implications:
Single: For individuals who are unmarried or legally separated as of the last day of the year.
Married Filing Jointly: Married couples can file a combined return. Both spouses' incomes and deductions are reported together, often resulting in lower taxes compared to filing separately.
Married Filing Separately: Married couples may file individually. This choice often result in higher taxes but may be advantageous in certain situations, such as when one spouse has significant medical expenses.
Head of Household: This category was created to support single parents and those who support their parents. Available to unmarried individuals who pay more than half the expenses for a household with a dependent, like a child or other relative. This status has lower effective tax rates than Single.
Qualifying Widow(er) with Dependent Child: For individuals whose spouse has died within the last two years and who are supporting a dependent child. It allows for the same tax benefits as Married Filing Jointly for up to two years after the spouse's death.
- Any analysis or commentary reflects the opinions of Casaplorer.com (a part of Wowa Leads Inc.) analysts and should not be considered financial advice. Please consult a licensed professional before making any decisions.
- The calculators and content on this page are for general information only. Casaplorer does not guarantee the accuracy and is not responsible for any consequences of using the calculator.
- Interest rates are sourced from financial institutions' websites.