Every year, the federal government collects a percentage of nearly every working American’s annual income, a collection that is known as income tax. The amount a person will have to pay come tax filing season is determined via their tax return, a form, and calculated based on three main factors:
- Total taxable income
- Where you live
- Filing status
Provide a few details below and our free income tax calculator will estimate how much you’ll owe on your 2023 federal and state tax return.
Income Tax Calculator
What is income tax?
Income taxes are collected by the government from individuals and businesses, typically used to fund public services. There are two types of income taxes: individual income tax and business or corporate income tax.
Individual income tax, also known as personal income tax, is when Americans give a percentage of their income, payable through the Internal Revenue Service (IRS). This amount is based on annual salary, wages, or other taxable earnings of a calendar year. Nearly all working Americans are required to file taxes at the federal level but may also have an income tax at the state and local level, depending on their place of residence.
Business income taxes apply to small businesses, corporations, self-employers, partnerships, and other for-profit business entities. In these instances, the amount owed is based on income after subtracting capital and operating expenses.
When is tax season 2024?
Taxes on income earned by individuals and small businesses during 2023 are not collected until the 2024 tax season.
The earliest the Internal Revenue Service (IRS) will begin accepting tax returns is January 29, 2024. The deadline to file federal income taxes is Monday, April 15, 2024. The majority of the 41 states that collect additional state income taxes follow the April 15th deadline as well.
For business owners, the W2 and 1099 forms must be filed by January 31, 2024.
Will the 2024 tax season be normal?
There were many new tax credits and deductions introduced during the COVID-19 pandemic. Measures such as stimulus checks, student loan and mortgage forbearance, and Paycheck Protection Program (PPP) loans each carried tax implications that affected tax filings. However, these policies primarily took place during 2021 and will not affect most Americans’ tax filings. For the most up-to-date changes, check the IRS website or consult a qualified tax professional.
What is tax filing status and what is it used for?
Tax filing statuses are determined by marital status, number of children, occupation, and several other factors. This status determines the type of tax return form used when filing taxes and in turn, affects how an individual is taxed and the amount they must pay.
There are five tax filing statuses: single, married filing separately, married filing jointly, head of household, and qualifying widow/widower with dependent child.
Tax filing status options
Tax filing status options.
A single filer is unmarried, divorced, a registered domestic partner, or legally separated according to state law. Heads of households or widowers cannot fall under the “single” category. These filers will have lower income limits for most exemptions.
For Tax Years 2023 and 2024
| Federal Income Tax Rate | Income Range for Single Taxpayer for 2023 | Income Range for Single Taxpayer for 2024 |
|---|---|---|
| 10% | $0 to $11,000 | $0 to $11,600 |
| 12% | $11,000 to $44,725 | $11,600 to $47,150 |
| 22% | $44,725 to $95,375 | $47,150 to $100,525 |
| 24% | $95,375 to $182,100 | $100,525 to $191,950 |
| 32% | $182,100 to $231,250 | $191,950 to $243,725 |
| 35% | $231,250 to $578,125 | $243,725 to $609,350 |
| 37% | Over $578,125 | Over $609,350 |
| Standard Deduction | $13,850 | $14,600 |
Individuals married at the end of the tax year can choose to file with their spouse, or file separately if they should choose. Under a married filing status, couples can record their respective incomes, exemptions, and deductions on the same tax return. It often provides a bigger refund or lower tax obligation.
Joint filing works best if one spouse has a significantly higher income. Otherwise, should both spouses work, and the income and itemized deductions are large and unequal, it can result in disparity and be more advantageous to file alone. Should you choose this option, you will use the single filing status.
For Tax Years 2023 and 2024
| Federal Income Tax Rate | Income Range for Taxpayer who is Married Filing Jointly in 2023 | Income Range for Taxpayers who are Married Filing Jointly in 2024 |
|---|---|---|
| 10% | $0 – $22,000 | $0 to $23,200 |
| 12% | $22,001 – $89,450 | $23,200 to $94,300 |
| 22% | $89,451 – $190,750 | $94,300 to $201,050 |
| 24% | $190,751 – $364,200 | $201,050 to $383,900 |
| 32% | $364,201 – $462,500 | $383,900 to $487,450 |
| 35% | $462,500 – $693,750 | $487,450 to $731,200 |
| 37% | Over $693,750 | Over $731,200 |
| Standard Deduction | $27,700 | $29,200 |
A single or unmarried taxpayer who pays for a minimum of 50% of the costs of supporting their household and stays with family members for whom they provide support for at least 6 months out of the year.
This includes paying more than half of the total household bills, rent or mortgage, property taxes, and other household expenses.
Because of this, a head of household benefits from a lower tax rate.
For Tax Years 2023 and 2024
| Federal Income Tax Rate | Income Range for Taxpayer filing as the Head of Household for 2023 | Income Range for Taxpayer filing as Head of Household for 2024 |
|---|---|---|
| 10% | $0 – $15,700 | $0 to $16,550 |
| 12% | $15,701 – $59,850 | $16,550 to $63,100 |
| 22% | $59,851 – $95,350 | $63,100 to $100,500 |
| 24% | $95,351 – $182,100 | $100,500 to $191,950 |
| 32% | $182,101 – $231,250 | $191,950 to $243,700 |
| 35% | $231,251 – $578,100 | $243,700 to $609,350 |
| 37% | Over $578,101 | Over $609,350 |
| Standard Deduction | $20,800 | $21,900 |
The year in which a spouse passes, the surviving spouse can normally use a joint filing status. In the following two years after, the surviving partner can file as a qualifying surviving spouse. They cannot continue claiming an exemption for the deceased yet claiming the standard deduction for a jointly filing married couple is allowed.
The tax bracket and income ranges for a surviving spouse are the same as those for married filing jointly.
For Tax Years 2023 and 2024
| Federal Income Tax Rate | Income Range for Taxpayer who is Married Filing Jointly in 2023 | Income Range for Taxpayers who are Married Filing Jointly in 2024 |
|---|---|---|
| 10% | $0 – $22,000 | $0 to $23,200 |
| 12% | $22,001 – $89,450 | $23,200 to $94,300 |
| 22% | $89,451 – $190,750 | $94,300 to $201,050 |
| 24% | $190,751 – $364,200 | $201,050 to $383,900 |
| 32% | $364,201 – $462,500 | $383,900 to $487,450 |
| 35% | $462,501 – $693,750 | $487,450 to $731,200 |
| 37% | Over $693,751 | Over $731,200 |
| Standard Deduction | $27,700 | $29,200 |
How to reduce taxable income
Want to pay less in taxes? The key is lowering your taxable income. It doesn’t involve earning less money, but rather being strategic so that a portion of your annual income is diverted to tax-advantaged accounts, rather than your pocket. There are two common methods to reduce taxable income: employee-sponsored retirement plans and individual retirement plans.
Employer-Sponsored Retirement Plans
Retirement plans offered through the workplace, such as a 401(k) or 403(b) allows an employee to make pre-tax contributions directly from their paycheck. This lowers take-home pay which in turn, reduces a person’s total taxable income.
There are limits to how much an employee can contribute to an employer-sponsored plan. These limits are determined by the IRS and can change as they deem fit. In 2024, the contribution limits increased to $23,000, up from $22,500 in 2023 and $20,500 in 2022. Individuals aged 50 and older are allotted “catch-up contributions” of $7,500 in 2023, an improvement from $6,500 last year.
Traditional Individual Retirement Accounts (IRA)
A traditional individual retirement account (IRA) is a tax advantaged savings account that works exactly like 401(k): contributions are made from pre-tax income and therefore lower annual taxable income. The primary differences are that IRAs are not offered through an employer and their contribution limits are lower ($7,000 in 2024). Note that it’s possible to have both an IRA and a 401(k).
Frequently asked questions
Frequently asked questions
Yes, there are 9 states where you are not required to pay income tax. They are Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming.
It could be as simple as an error, or it could be a legit reason. Some of the instances where this may occur are: if you didn’t earn enough during the fiscal year, you are exempt from federal taxes, you live and work in different states or you live in an income tax-free state.
The amount of taxes you owe to the federal government on your annually earned income. Based on how much you’ve earned, you may or may not owe any federal taxes; those who make less than the standard deduction do not owe any income taxes.
Earnings before taxes, or pretax income, is the overall income earned by a business before taxes are subtracted or accounted for.
Due to pretax earnings excluding taxes, this measure enables the profitability of companies to be compared across industries or regions where taxes differ.
Where your employer takes a certain amount or percentage out of your paycheck for taxes, sending it to the IRS on your behalf. Tax refunds are granted should too much money be withheld, but if too little is withheld, money will be owed when your return is filed.
For individuals who work for themselves, their tax rate stands at 15.3%. Consisting of two parts: 12.4% for Social Security and 2.9% for Medicare.
Use our free tax calculator at the top of the page to find out!
A general rule is to set aside 30-35% of your total income for taxes if you’re working on a 1099 employment basis.
Independent contractors are required to pay taxes 4 times a year, once per quarter.
A tax extension doesn’t give you more time to pay, only more time to finish any necessary paperwork.
An extension for your taxes can be done by submitting Form 4868 with the IRS online or by mail. It must be done BEFORE the last day for filing taxes. This extension gives you additional months to prepare your return no matter the reason.
