The US uses a progressive tax system with 7 brackets from 10% to 37%. Find out which bracket you're in.
Your marginal rate applies only to income within that bracket — not your entire income.
The effective rate (total tax / income) is always lower than your marginal rate.
Reach for this tool whenever a financial decision hinges on this type of calculation. Small differences in rate or term become large differences in total cost or return over multi-year horizons — differences that only become visible when you run the actual numbers.
The most consequential mistake is comparing financial figures that are not on the same basis — gross versus net, before-tax versus after-tax, or nominal versus inflation-adjusted. Always check whether figures you are comparing use the same definition.
A small business owner compares two financing options for new equipment: a 5-year bank loan at 5.2% versus a leasing arrangement with a monthly fee. The calculator translates both into a total cost figure, making the comparison straightforward.
10%, 12%, 22%, 24%, 32%, 35%, and 37% for single filers.