About The Tax Calculator

Some information about the figures used to generate the answers displayed in The Tax Calculator:

Federal Income Tax

The Tax Calculator uses Income tax information from the tax year 2017 to calculate the deductions made on a salary. Although we have tried to make this site accurate, it is by no means infallible, and is not intended to give you your exact tax data. Because of the number of variables involved, this site can't do the job of Form 1040. The main considerations are included, others are not, but we hope that most people will be able to get a good approximation of what their employer will withhold.

Federal Income tax is paid only on TAXABLE income, which is however much of your salary is left after the deductions have been made. Details of the deductions included in this site, and the tax bands, below.

Standard Deductions

Standard Deductions
Single$10,400
Married Joint$20,800
Married Separate$10,400
Head of House$13,400
Additional Dependents
Each Dependent$4,050

Deductions are calculated according to how many dependents you have (excluding yourself and your spouse). There is a standard deduction for each filing status. For simplicity on this site, these standard deductions include the personal exemption of $4,050 (doubled for joint returns).

For single filing status, the standard deduction is $10,400. If you are married and filing a joint return, the standard deduction is $20,800. If you are married and filing separate returns, the standard deduction is $10,400. If you are the head of the household, the standard deduction is $13,400.

On top of this, for each dependent you list as an exemption, you get an additional $4,050 deducted.

Other Deductions

The "Other Monthly Deductions" allows you to enter a $ value for any other amount you wish to have included as a deduction. This is so you can compensate for things such as retirement plan contributions, which are tax free. Any value you enter in here (the monthly deduction) is multiplied by 12, and then included in the deductions to find the taxable pay. Whatever you enter into this field is also subtracted from the take-home pay value - because contributions of this type are not coming home with you.

PEP and Pease

PEP Thresholds
Single$261,500
Married Joint$313,800
Married Separate$156,900
Head of House$287,650
PEP Phaseout Rate2%
For each$2,500

Re-introduced in 2013, PEP and Pease are two ways in which tax deductions are reduced for higher earners, effectively increasing the tax you pay. PEP is short for Personal Exemption Phaseout and reduces the amount deductible for each dependent (including yourself and your spouse). Pease is named after the congressman who introduced it originally, and reduces the amount of "Other deductions" that you can deduct from your salary.

By default, you can deduct $4,050 for yourself, your spouse (if filing a joint return) and each of your dependents from your salary before paying tax. However, if you earn more than the PEP threshold (different for each filing status, listed in the table to the left, you will lose 2% of these exemptions for each $2,500 ($1,250 for married filing separately), or part thereof, that you earn over the threshold. If you earn enough, the personal exemptions will be reduced to zero (although you will keep the remainder of the standard deduction).

Pease Thresholds
Single$261,500
Married Joint$313,800
Married Separate$156,900
Head of House$287,650
Pease Phaseout Rate3%
Pease Phaseout Max80%

Pease reduces the deductible amount of "Other deductions" at a rate of 3 cents for each dollar you earn over the Pease threshold, which is different for each filing status (see the table to the left). These deductions are never reduced completely to zero, however - Pease deduction phaseouts are limited to 80% of the total deductions.

In fact, some itemised deductions are not susceptible to reduction under the Pease code, but for the purposes of calculations on this website, all deductions are affected by Pease. The total value of any deductions is still subtracted from the "Take home" total.

Single

Single Tax Rates
$ 0 - $ 9,32510 %
$ 9,325 - $ 37,95015 %
$ 37,950 - $ 91,90025 %
$ 91,900 - $ 191,65028 %
$ 191,650 - $ 416,70033 %
$ 416,700 - $ 418,40035 %
Over $ 418,40039.6 %

If your filing status is "single", the standard deduction is $10,400. The first tax band covers annual TAXABLE income from $0 to $9,325. On this band, you will pay 10% income tax. Between $9,325 and $37,950 you will pay 15%. Between $37,950 and $91,900 you will pay 25%. Between $91,900 and $191,650 you will pay 28%. Between $191,650 and $416,700 you will pay 33%. Between $416,700 and $418,400 you will pay 35%.

Anything earned over $418,400 is taxed at 39.6%.

It is possible that your deductions might lower your income tax such that Alternative Minimum Tax is applied - see the AMT section below for more information.

Married Joint

Married Joint Tax Rates
$ 0 - $ 18,65010 %
$ 18,650 - $ 75,90015 %
$ 75,900 - $ 153,10025 %
$ 153,100 - $ 233,35028 %
$ 233,350 - $ 416,70033 %
$ 416,700 - $ 470,70035 %
Over $ 470,70039.6 %

If you are a married couple filing a joint return, the standard deduction is $20,800. The first tax band covers annual TAXABLE income from $0 to $18,650. On this band, you will pay 10% income tax. Between $18,650 and $75,900 you will pay 15%. Between $75,900 and $153,100 you will pay 25%. Between $153,100 and $233,350 you will pay 28%. Between $233,350 and $416,700 you will pay 33%. Between $416,700 and $470,700 you will pay 35%.

Anything earned over $470,700 is taxed at 39.6%.

It is possible that your deductions might lower your income tax such that Alternative Minimum Tax is applied - see the AMT section below for more information.

Married Filing Separately

Married Separate Tax Rates
$ 0 - $ 9,32510 %
$ 9,325 - $ 37,95015 %
$ 37,950 - $ 76,55025 %
$ 76,550 - $ 116,67528 %
$ 116,675 - $ 208,35033 %
$ 208,350 - $ 235,35035 %
Over $ 235,35039.6 %

If you are married, but filing a separate return, the standard deduction is $10,400. The first tax band covers annual TAXABLE income from $0 to $9,325. On this band, you will pay 10% income tax. Between $9,325 and $37,950 you will pay 15%. Between $37,950 and $76,550 you will pay 25%. Between $76,550 and $116,675 you will pay 28%. Between $116,675 and $208,350 you will pay 33%. Between $208,350 and $235,350 you will pay 35%.

Anything earned over $235,350 is taxed at 39.6%.

It is possible that your deductions might lower your income tax such that Alternative Minimum Tax is applied - see the AMT section below for more information.

Head of Household

Head of House Tax Rates
$ 0 - $ 13,35010 %
$ 13,350 - $ 50,80015 %
$ 50,800 - $ 131,20025 %
$ 131,200 - $ 212,50028 %
$ 212,500 - $ 416,70033 %
$ 416,700 - $ 444,55035 %
Over $ 444,55039.6 %

If you are the head of a household, the standard deduction is $13,400. The first tax band covers annual TAXABLE income from $0 to $13,350. On this band, you will pay 10% income tax. Between $13,350 and $50,800 you will pay 15%. Between $50,800 and $131,200 you will pay 25%. Between $131,200 and $212,500 you will pay 28%. Between $212,500 and $416,700 you will pay 33%. Between $416,700 and $444,550 you will pay 35%.

Anything earned over $444,550 is taxed at 39.6%.

It is possible that your deductions might lower your income tax such that Alternative Minimum Tax is applied - see the AMT section below for more information.

Alternative Minimum Tax

AMT Exemption Amounts
Single$54,300
Married Joint$84,500
Married Separate$42,250
Head of House$54,300
AMT Phaseout Thresholds
Single$120,700
Married Joint$160,900
Married Separate$80,450
Head of House$120,700
AMT Tax Rate Thresholds
Single$187,800
Married Joint$187,800
Married Separate$93,900
Head of House$187,800
AMT Tax Rates
Below threshold26%
Above threshold28%

The Alternative Minimum Tax, or AMT, was introduced in an effort to make sure that high income earners paid a suitable amount of tax without being able to make large deductions and thus avoid Federal Income Tax. A baseline "Tentative Minimum Tax" (TMT) is calculated and compared with the taxpayer's Federal Income Tax. If the TMT is greater than the Federal Income Tax, the Alternative Minimum Tax is applied as the difference between the two values.

There are AMT thresholds below which no TMT will be calculated - for single filers this is 54,300, for joint married applications it is 84,500, it is 42,250 if married filing separate returns and it's 54,300 for the Head of Household. The AMT exemption is reduced by 25 cents for each dollar earned over the phaseout thresholds detailed in the table to the left, until it reaches zero - or in the case of married filing separately, the exemption can be reduced further to a negative value as large as the original exemption (i.e. additional tax is applied).

Once the exemption is deducted from gross income, the TMT is calculated at 26% of income under the AMT high-earning threshold and 28% of income over this threshold. The threshold is different for each filing status, and these values are listed in the table to the left.

Once TMT has been calculated, it is compared to the Federal Income Tax which has been calculated according to the previous section. If the TMT is higher than the income tax, an additional tax of the difference between the TMT and income tax is applied, so that the taxpayer pays the TMT.

Social Security

OASDI portion6.2%
upto a maximum$7,886.40/year
Medicare portion1.45%
Additional Medicare0.9%

Social Security for employees is calculated as the OASDI (Old Age, Survivors and Disability Insurance) portion of 6.2% of income up to $127,200 plus the Medicare portion of 1.45% of all earnings. For the tax year 2017, this means that the maximum OASDI contribution is $7,886.40. There is no maximum for the Medicare portion.

Starting in 2013, employers were instructed to withold an additional Medicare tax of 0.9% on earnings over the additional Medicare threshold. For single filers, this threshold is $200,000. For married couples filing a joint return, this threshold is $250,000, for married separate returns the threshold is $125,000 and for the head of household it is $200,000.

State Income Tax

This site does not currently calculate state income tax, which is levied differently by each state. In the future, we hope to be able to integrate it into the site.

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