Methodology

Income tax calculations

Federal income tax

We compute federal income tax using the IRS 2026 marginal tax brackets and standard deductions. We assume the taxpayer takes the standard deduction (not itemized) — this is the majority case since the Tax Cuts and Jobs Act of 2017.

2026 standard deductions:

• Single or Married Filing Separately: $16,100
• Married Filing Jointly: $32,200
• Head of Household: $24,150

2026 federal tax brackets (single):

Tax = sum over brackets of (rate × min(taxable, bracketUpper - prevBracketUpper))

10% on $0 – $12,400
12% on $12,400 – $50,400
22% on $50,400 – $105,700
24% on $105,700 – $201,775
32% on $201,775 – $256,225
35% on $256,225 – $640,600
37% on $640,600+
      

Source: IRS Revenue Procedure 2025-32 (inflation adjustments).

Pre-tax deductions not modeled: This calculator does not subtract 401(k), HSA, FSA, or health-insurance premiums before computing federal/state tax. Real take-home for employees with these benefits will be HIGHER than shown, because pre-tax deductions lower taxable income.

Example: A $75,000 salary with 10% 401(k) ($7,500) + $3,000 HSA reduces AGI from $75,000 to $64,500. After the $16,100 standard deduction, taxable income falls from $58,900 to $48,400 — moving the filer out of the 22% bracket into the 12% bracketand saving ~$2,110 in federal tax ($7,670 → $5,560). This bracket-shift effect is the main financial benefit of pre-tax contributions.

FICA (Social Security + Medicare)

All wages are subject to FICA payroll taxes:

• Social Security: 6.2% on wages up to 184,500 (2026 wage base)
• Medicare: 1.45% on all wages (no cap)
• Additional Medicare: +0.9% on wages above $200K (single), $250K (MFJ), $125K (MFS)

Source: SSA.gov, IRS Publication 15 (Circular E), 2026.

State income tax

State income tax models vary by state type:

• No income tax (9 states): AK, FL, NV, NH, SD, TN, TX, WA, WY — tax = $0 on wages (NH taxes only interest/dividends)
• Flat rate (15 states): AZ 2.5%, CO 4.40%, GA 5.49%, ID 5.695%, IL 4.95%, IN 3.05%, IA 3.8%, KY 4.00%, LA 3.00%, MI 4.25%, MS 4.40%, NC 4.25%, OH 3.5%, PA 3.07%, UT 4.55% (some with local add-ons)
• Progressive (26 states + DC = 27): AL, AR, CA, CT, DE, DC, HI, KS, ME, MD, MA, MN, MO, MT, NE, NJ, NM, NY, ND, OK, OR, RI, SC, VT, VA, WV, WI — use official state DOR bracket tables with per-filing-status standard deductions (see tax-year note below).

Total: 9 + 15 + 27 = 51 = all 50 states + DC.

Filing status accuracy

Our calculators support four filing statuses, all Verified against official state DOR tax rate schedules (verified July 2026):

• Single & Married Filing Jointly: Verified — real per-status brackets and standard deductions from official state DOR sources and Tax Foundation.
• Married Filing Separately: Verified — per-state MFS schedules from official DOR sources. Most states define MFS = Single brackets by statute (e.g., CA, NY, OR, MO); some use MFJ÷2 (e.g., MN); others have distinct MFS schedules (e.g., WI Schedule C, WV Schedule II).
• Head of Household: Verified — per-state HOH schedules. Some states give HOH its own bracket schedule (e.g., CA Schedule Z, ME Schedule #2, VT Schedule Z); some use Single brackets (e.g., WI, MO, VA); some use MFJ brackets (e.g., MD, OR).

Tax year note: Where a state has published Tax Year 2026 rate schedules (e.g., MN, WI, MO, MT, MD), those are used. Where only Tax Year 2025 schedules are available (most states as of July 2026 — 2026 forms typically release October 2026), the 2025 figures are used. Each state's data is sourced from its DOR; treat figures as current to the latest official publication.

Other simplifications: Our state calculations:

1. Do not model state-specific credits or exemptions beyond the standard deduction.
2. Local taxes (NYC, Yonkers, Ohio cities, Maryland counties, Indiana counties) are noted but not added to the estimate.
3. State-level phase-outs (e.g., Connecticut's tax benefit recapture, Maine's deduction phase-out) are not modeled.

Real state tax liability may differ materially. Always verify with your state's revenue department or a tax professional.

Compound interest & savings

Standard compound interest formula with monthly compounding (n=12):

A = P(1 + r/n)^(n·t) + PMT × [((1 + r/n)^(n·t) - 1) / (r/n)]

where:
  P   = initial principal
  r   = annual interest rate (decimal, e.g., 0.07 for 7%)
  n   = compounding periods per year (12 for monthly)
  t   = time in years
  PMT = periodic contribution (added at end of each period)
      

Source: Standard formula taught in FIN 301 / corporate finance textbooks; verified against investor.gov compound calculator.

Benchmark rates for context (2026): S&P 500 long-run average ~10% nominal (1926–2025, dividend-reinvested; NYU Stern / Damodaran). US 10-year Treasuries ~4.5% (2024–2026 range; Freddie Mac PMMS). High-yield savings 4–5% (FDIC-insured, 2024–2026). Our default 7% reflects a balanced, inflation-adjusted equity expectation (10% nominal − ~3% inflation). Short-term rates track the Fed funds rate — the FOMC's current target is 3.50%–3.75% (June 2026 FOMC statement).

Mortgage & loan amortization

M = P × [r(1+r)^n] / [(1+r)^n - 1]

where:
  P = loan principal
  r = monthly interest rate (annual / 12)
  n = total number of monthly payments (years × 12)
      

This formula computes the level monthly payment for a fully-amortizing fixed-rate loan. Our mortgage calculator does not include property taxes, homeowners insurance, PMI, or HOA — those vary too much by location. The "monthly payment" shown is principal + interest only.

Retirement projections

Retirement, 401(k), and Roth IRA calculators reuse the compound interest formula with additional assumptions:

• 4% rule for safe withdrawal (Trinity Study, 1998)
• Employer match modeled as additional contribution up to specified cap
• Roth vs Traditional tax treatment differences noted in calculator copy

We do not model sequence-of-returns risk or inflation-adjusted withdrawal in basic projections.

Social Security benefits

The Social Security calculator estimates your Primary Insurance Amount (PIA) from average indexed monthly earnings (AIME), then adjusts for claim age:

PIA = 0.90 × (AIME up to bend1) + 0.32 × (AIME between bend1 and bend2) + 0.15 × (AIME above bend2)

2026 bend points: bend1 = $1,286, bend2 = $7,749 (per month of AIME)

Claim age adjustment (FRA = 67):
  Claim at 62 (60 months early): −25%  (5/12 of 1% per month)
  Claim at 67 (FRA):             100%
  Claim at 70 (36 months late):  +24%  (2/3 of 1% per month)
      

Example: AIME of $5,000/mo (about $60,000/year average earnings over 35 years) gives PIA = 0.90 × 1286 + 0.32 × (5000 − 1286) = 1157.40 + 1188.48 = $2,346/mo at FRA 67. Claiming at 62 reduces this to ~$1,759/mo; delaying to 70 increases it to ~$2,909/mo.

Source: SSA.gov PIA formula, 2026 bend points; delayed retirement credits perSSA Delayed Retirement Credits.

Capital gains

2026 long-term capital gains brackets (single)

• 0% rate: taxable income up to $49,450
• 15% rate: $49,450 – $545,500
• 20% rate: above $545,500

Plus Net Investment Income Tax (NIIT) of 3.8% on the lesser of investment income or modified AGI above $200K (single) / $250K (MFJ).

Short-term gains (assets held ≤ 1 year) taxed as ordinary income at federal income tax rates.

Self-employment tax

SE tax = 15.3% × 92.35% × net SE income

  = (12.4% Social Security up to 184,500 + 2.9% Medicare) × 0.9235 × net SE income

Half of SE tax is deductible from gross income.
      

Data sources

• Federal tax brackets, deductions: IRS Revenue Procedure 2025-32
• FICA rates, wage base: SSA.gov, IRS Publication 15 (2026)
• State income tax rates: Tax Foundation, "State Individual Income Tax Rates and Brackets, 2026" (Feb 2026); cross-checked against state department of revenue websites
• State sales tax: Tax Foundation 2026 state + local average combined rates
• Capital gains / NIIT: IRS Publication 505, 2026
• Standard formulas: amortization (any finance textbook); compound interest (investor.gov reference); 4% rule (Trinity Study, Cooley et al. 1998)

Limitations

These calculators produce estimates suitable for general planning. They are not a substitute for:

• Tax preparation software (TurboTax, FreeTaxUSA, etc.)
• A certified public accountant (CPA)
• A fee-only financial advisor
• The actual IRS Form 1040 instructions

See our full disclaimer.

Changelog

Material changes to calculator formulas or data, newest first:

• 2026-07-13: Fixed Social Security delayed-retirement-credit calculation. The outer clamp Math.min(1, multiplier) had zeroed out all delayed credits, so claiming at 70 returned the same benefit as claiming at 67. Removed the clamp; age-70 now correctly shows a ~24% increase. Full retirement age benefit unchanged. Affected calculator: Social Security.
• 2026-07-13: Fixed stale 401(k) contribution limit ($23,000 → $24,500 for 2026) on the 401(k) pSEO template. Added 401(k) hub page. Updated catch-up limits: $8,000 (50+) and $11,250 enhanced (ages 60–63, SECURE 2.0).
• 2026-07-13: Corrected state-tax-type counts (9 none / 15 flat / 27 progressive = 51). Previous methodology page undercounted no-tax states by omitting NH and miscounted flat states.
• 2026-06-20: Initial 2026 federal tax data loaded (IRS Revenue Procedure 2025-32). State tax brackets updated for 2026 (Tax Foundation, cross-checked against state DORs). MFS and HOH filing-status variants shipped (approximated from single/MFJ, labeled "Estimated" in UI).
• 2026-06-16: Site launched. Initial calculator set: paycheck, income-tax, compound-interest, mortgage, loan, retirement, 401(k), capital-gains.

Update cadence

• Annually (Oct–Nov): IRS inflation adjustments → federal brackets, deductions, FICA wage base
• Quarterly: review of state tax rate changes
• As needed: any material tax law changes (e.g., TCJA expirations in 2026)