Federal Income Tax Calculator USA (2024)
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Frequently Asked Questions (FAQ)
What is Federal Income Tax?
Federal income tax is a tax levied by the United States federal government on the annual earnings of individuals, corporations, trusts, and other legal entities. The U.S. uses a progressive tax system with rates ranging from 10% to 37%.
How is my Federal Income Tax calculated?
Federal income tax is calculated based on your taxable income, which is your total income minus deductions such as 401(k) contributions, IRA contributions, and itemized deductions. Marginal tax rates apply progressively to different portions of your income.
What is FICA?
FICA (Federal Insurance Contributions Act) tax funds Social Security and Medicare. Currently, it is 7.65% of your total income (6.2% Social Security + 1.45% Medicare) for employees.
Does my state or city income tax affect my take-home pay?
Yes. State and local taxes are additional taxes on top of federal taxes and FICA. Depending on your location, these taxes can significantly impact your take-home pay.
How can I reduce my taxable income?
You can reduce taxable income by contributing to retirement accounts like 401(k) or IRA, claiming deductions such as mortgage interest or medical expenses, and using tax credits where eligible.