Tax Calculators — Capital Gains & Income

Federal income tax for 2026 uses seven progressive brackets (IRS Rev. Proc. 2025-32): 10%, 12%, 22%, 24%, 32%, 35%, and 37%. Each bracket applies only to income within that range — a single filer earning $80,000 pays 10% on the first $12,400, 12% on income between $12,400-$50,400, and 22% on the remainder, not a flat 22%. The 2026 standard deduction is $16,100 for single filers and $32,200 for married filing jointly.

State income tax stacks on top of federal, but with enormous variation. Nine states levy no individual income tax in 2026 (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming). Seven states use flat rates between 3-6% (including Illinois at 4.95%, Kentucky at 4%, Michigan at 4.25%). The remaining states use progressive brackets topping out from California's 13.3% down to North Dakota's 2.5%. FICA (Social Security 6.2% up to the $184,500 wage base plus Medicare 1.45% on all wages, plus 0.9% Medicare surtax above $200,000) applies uniformly regardless of state.

Three factors dominate. Pre-tax contributions (401(k), health insurance, HSA) reduce federal and state taxable income dollar-for-dollar — contributing $10,000 to a 401(k) at a 24% federal + 6% state combined marginal rate saves $3,000 in annual tax, raising take-home by roughly $250 per month.

Filing status changes the bracket thresholds. Married filing jointly roughly doubles each federal bracket width vs single — a married couple with combined income of $150,000 typically pays several thousand less per year in federal tax than two single filers earning $75,000 each. Head-of-household status provides intermediate relief for single parents. Geographic move is the third large lever: the same $120,000 salary yields roughly $8,000-$10,000 more annual take-home in a no-tax state (Texas, Florida) than in California's 13.3% top bracket.

Capital gains planning is the highest-leverage single area for investors. Long-term capital gains (assets held over one year) are taxed at 0%, 15%, or 20% federal depending on total taxable income — the 0% bracket applies up to $48,350 single / $96,700 MFJ in 2026, meaning strategic realization in lower-income years can harvest gains tax-free at the federal level. State treatment varies: California, Minnesota, and New Jersey tax all capital gains as ordinary income; most states apply their normal bracket structure.

Retirement account choice compounds over decades. Traditional 401(k) and IRA contributions reduce current taxable income; Roth equivalents grow tax-free and withdraw tax-free but use after-tax dollars. The right choice depends primarily on whether current marginal tax rate is higher or lower than expected retirement marginal rate. HSA contributions are triple tax-advantaged (deductible going in, growth tax-free, medical withdrawals tax-free) and are frequently the most tax-efficient vehicle for eligible savers.