What are the 2025 federal income tax brackets?

2025 federal brackets (single): 10% on income up to $11,925; 12% up to $48,475; 22% up to $103,350; 24% up to $197,300; 32% up to $250,525; 35% up to $626,350; 37% above $626,350. The 2025 standard deduction is $15,000 (single) and $30,000 (married filing jointly).

How does self-employment tax work?

Self-employed individuals pay 15.3% SE tax (12.4% Social Security + 2.9% Medicare) on 92.35% of net self-employment income. You can deduct half of SE tax from gross income. The Social Security portion applies up to the $176,100 wage base in 2025.

What is the difference between marginal and effective tax rate?

Your marginal rate is the rate on your last dollar of income — the top bracket you fall into. Your effective rate is your total tax divided by total income — always lower than your marginal rate because lower income is taxed at lower rates. Many people mistakenly fear bracket creep, not realizing only the income above a threshold is taxed at the higher rate.

Should I take the standard deduction or itemize?

Take whichever is larger. The 2025 standard deduction is $15,000 (single) and $30,000 (married). Itemizing makes sense if your mortgage interest + state/local taxes + charitable contributions + medical expenses exceed the standard deduction. With the high standard deduction, fewer than 15% of taxpayers itemize.

Can I deduct home office expenses?

Self-employed individuals can deduct home office expenses if the space is used regularly and exclusively for business. The simplified method allows $5/sq ft up to 300 sq ft ($1,500 max). W-2 employees cannot deduct home office expenses under current tax law (the TCJA suspended this deduction through at least 2025).

What triggers an IRS audit?

Common audit triggers include: unusually high deductions relative to income, large business losses (especially on Schedule C), home office deductions, cryptocurrency transactions, large cash transactions, and math errors. Most returns are selected randomly or by automated screening. Having documentation for all deductions is the best protection.

Tax Estimator

Estimate your federal, state, and self-employment taxes across all income types — with bracket breakdowns, deductions, and common credits.

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The U.S. progressive income tax applies different rates to different portions of your income — not a flat rate on everything you earn. In 2025, the federal brackets run from 10% on the first $11,925 up to 37% on income above $626,350 (single filers). A $75,000 salary results in an effective federal rate of approximately 14.5% — not the 22% marginal rate of the bracket it sits in.

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Net profit after business expenses — SE tax calculated automatically

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Other Income Sources dividends, capital gains, rental, retirement… ▼

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Above-the-Line Adjustments IRA, 401k, HSA, student loan… ▼

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Tax Estimate Results

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Frequently Asked Questions

Common questions about this calculator and how to use it effectively.

What is the difference between effective and marginal tax rate?

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Your marginal rate is the tax rate on your highest dollar of income — your top bracket. Your effective rate is total tax divided by total income — always lower because each bracket only applies to income within that range. Example: $80,000 income puts you in the 22% bracket, but your effective rate is typically around 13–15%.

What is self-employment tax and how is it calculated?

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Self-employment tax is 15.3% on 92.35% of net self-employment profit — covering both the employer and employee halves of Social Security (12.4%) and Medicare (2.9%). You can deduct half of SE tax from your AGI. On $60,000 net profit: $60,000 × 0.9235 = $55,410 × 15.3% = $8,478 SE tax. If you are paid hourly or want to convert your income to an effective hourly rate, try our Salary to Hourly Calculator.

What is AGI (Adjusted Gross Income)?

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AGI is total income minus above-the-line deductions: IRA contributions, 401k contributions, HSA contributions, student loan interest, SE health insurance, and the deductible half of SE tax. AGI is critical — it determines eligibility for many deductions, credits, and phase-outs. Lower AGI = lower tax bill.

Standard deduction vs. itemizing — which should I choose?

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Take whichever is larger. 2025 standard deduction: $14,600 (single), $29,200 (married filing jointly), $21,900 (head of household). Itemize only if mortgage interest + property taxes + state income tax (SALT capped at $10k) + charitable contributions + medical expenses (above 7.5% AGI) exceeds your standard deduction. Model Roth vs Traditional tax treatment over your full career with our Retirement Calculator.

How are long-term capital gains taxed in 2025?

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Long-term gains (assets held 12+ months) are taxed at 0%, 15%, or 20% based on total taxable income. For single filers in 2025: 0% up to $48,350; 15% up to $533,400; 20% above $533,400. Qualified dividends use the same rates. This is significantly lower than ordinary income rates for most investors. See how dividend reinvestment compounds long-term gains with our DRIP Calculator.

What is the Net Investment Income Tax (NIIT)?

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A 3.8% surtax on net investment income (dividends, capital gains, rental income) when your MAGI exceeds $200,000 (single) or $250,000 (married filing jointly). This calculator automatically applies NIIT when applicable — it's an often-overlooked tax for higher-income investors.

How does Social Security income get taxed?

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Up to 85% of Social Security benefits can be taxable depending on your combined income (AGI + non-taxable interest + half of SS benefits). Below $25,000 combined: 0% taxable. $25,000–$34,000: up to 50% taxable. Above $34,000: up to 85% taxable. This calculator applies the correct taxable portion automatically.

What tax credits reduce my tax bill the most?

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The most impactful credits: Child Tax Credit ($2,000/child under 17), Child and Dependent Care Credit (up to $3,000 for 1 child, $6,000 for 2+), American Opportunity Credit ($2,500/year, first 4 years of college), and energy/EV credits (up to $7,500 for qualifying EVs). Credits reduce tax dollar-for-dollar — far more valuable than deductions.

Tax Estimator

Frequently Asked Questions

What is the difference between effective and marginal tax rate?

What is self-employment tax and how is it calculated?

What is AGI (Adjusted Gross Income)?

Standard deduction vs. itemizing — which should I choose?

How are long-term capital gains taxed in 2025?

What is the Net Investment Income Tax (NIIT)?

How does Social Security income get taxed?

What tax credits reduce my tax bill the most?

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