Marginal and effective breakdown, standard vs itemized.
Covers: federal, tax, marginal, effective, deduction, itemized.
Open the Federal Income Tax tool →We start from your income and subtract the larger of the standard deduction or your itemized 'big four', state and local taxes (capped at $40,400 for 2026, sliding down above $505,000 of income to a $10,000 floor, and halved if you file separately), mortgage interest, charitable gifts, and medical expenses above 7.5% of your income. Then we apply the IRS marginal brackets for your filing status.
Your effective rate is total tax ÷ income. Your marginal rate is the bracket your next dollar of income lands in, handy for weighing a raise or a pre-tax contribution.
If you or your spouse are 65 or over we apply IRC §151(d)(5)(C): $6,000 each, phasing out by 6% of income over $75,000, or $150,000 on a joint return. A married filer gets it only on a joint return.
If you take the standard deduction we also apply §170(p), which since 2026 lets you deduct up to $1,000 of cash giving — $2,000 on a joint return — without itemizing. It counts only cash to a public charity, not gifts of property or to a donor-advised fund, so if your giving was not all of that kind the real figure is smaller. If you itemize instead, the same Act works the other way: §170(b)(1)(I) allows your giving only above 0.5% of your income, so the first $500 of giving at $100,000 deducts nothing. The floor applies to itemizers only — §170(p) is computed without regard to it — which is why the same $1,000 can be worth more to someone who does not itemize.
Above the 37% bracket, §68 is back for the first time since 2017 and caps what an itemized deduction is worth at 35 cents on the dollar. We apply it.
Tell us the interest you paid on a car loan and we apply §163(h)(4): up to $10,000 a year, falling by $200 for every $1,000 of income — or part of one — over $100,000, or $200,000 on a joint return, so it is gone by $150,000 and $250,000. Unlike the tips and overtime deductions this one is open to a married filer filing separately. Because a part of a thousand counts as a whole one, crossing a thousand-dollar line costs the whole $200 — so if you are just above $100,000 the marginal rate here can look startling for the next hundred dollars, and it is real. It reaches only a loan taken out after 2024, secured by a first lien on a new vehicle assembled in the United States that you drive yourself, and the VIN goes on your return.
Two other 2026 deductions are not modeled here, so if one applies to you your real tax is lower than this: up to $25,000 of tips (§224), and up to $12,500 of overtime — $25,000 filing jointly — (§225). Take-Home asks for those and applies them.
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