1. What is the US Federal Tax Calculation?

The US Federal Tax calculation determines how much income tax you owe to the federal government based on your taxable income, filing status, and other factors. The system uses progressive tax brackets where higher income is taxed at higher rates.

2. How Does the Calculator Work?

The calculator uses the 2023 federal tax brackets and FICA rates:

Where:

• \( Taxable\ Income \) — Your income after deductions and exemptions
• \( Federal\ Tax\ Rate \) — Progressive rates based on income brackets
• \( FICA \) — Social Security (6.2%) and Medicare (1.45%) taxes

Explanation: The calculator applies the appropriate tax rate to each portion of your income that falls within specific brackets, then adds FICA taxes.

3. Importance of Tax Calculation

Details: Accurate tax estimation helps with financial planning, understanding take-home pay, and ensuring proper withholding to avoid penalties or large refunds.

4. Using the Calculator

Tips: Enter your taxable income (after deductions) and select your filing status. The calculator will show your estimated federal income tax, FICA taxes, and total tax burden.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between marginal and effective tax rates?
A: Your marginal rate is the tax on your last dollar earned, while your effective rate is total tax divided by total income (usually lower).

Q2: Are state taxes included in this calculator?
A: No, this only calculates federal taxes. State taxes vary by location and must be calculated separately.

Q3: What about deductions and credits?
A: This calculator works with taxable income. You should subtract deductions before entering your income amount.

Q4: Why is Social Security tax capped?
A: Social Security only taxes income up to $160,200 (for 2023) because benefits are also capped.

Q5: What's the additional Medicare tax?
A: High earners pay an extra 0.9% Medicare tax on income above $200,000 (single) or $250,000 (married filing jointly).