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Federal Tax Due

Estimating Your Federal Income Tax Due

The United States, like many other countries, has a “progressive income tax”–high-income earners pay a higher percentage of their earnings in taxes than lower-income earners do. Let’s keep things simple and assume that you file your federal return as a “single” taxpayer and that you can’t be claimed as someone else’s dependent. Section 3. 1 in The Calculus of Happiness then discusses how you’d calculate your federal tax due. That number depends on your “tax bracket,” which is set by the Internal Revenue Service (the tax collector), and on your “taxable income,” the amount of your earned income subject to tax. (The IRS allows you certain deductions and other exemptions, so your taxable income is smaller than your earned income.) Each tax bracket uses a different percentage the IRS applies to a certain taxable income range. These, and the insights gained from the federal tax due formula–equation (3.4) in The Calculus of Happiness–suggest several ways to lower your tax burden (see Chapter 3 in The Calculus of Happiness).

The calculator below uses the IRS’ 2017 tax brackets to calculate federal tax due based on taxable income (not earned income). Feel free to input a taxable income value into the green cell to see how much federal tax would be due on that amount in 2017.

 

Limitations

The calculator above uses the IRS’ 2017 tax bracket numbers. In a future iteration, I will post a calculator that allows the user to input the income ranges for each tax bracket (so that the calculator can be used for any year).