You must decide between taking a fixed "standard" deduction or listing specific "itemized" expenses. Choose whichever is higher to lower your taxable income the most. Filing Status Deduction Amount Single / Married Filing Separately Married Filing Jointly Head of Household
: Unreimbursed costs exceeding 7.5% of your AGI. Charitable Gifts : Donations to qualified non-profits. Step 4: Calculate Your Tax Liability 2026 Tax Brackets and Federal Income Tax Rates calculate your income tax
Start by adding up every dollar you earned throughout the year. This is your "raw" income before any reductions. You must decide between taking a fixed "standard"
: Wages, salaries, tips, and bonuses from your job. Charitable Gifts : Donations to qualified non-profits
Calculating your income tax involves a multi-step process that transforms your total earnings into a final amount owed or a refund. For the 2026 tax year, recent legislation like the One, Big, Beautiful Bill (OBBB) has permanently set tax rates while adjusting brackets and deductions for inflation. 🏗️ Step 1: Calculate Your Gross Income
You can reduce your gross income by taking "above-the-line" deductions. These are available even if you don't itemize.