How is take-home pay calculated?

Take-home pay is your gross salary minus federal income tax (based on tax brackets and standard deduction), Social Security tax (6.2% up to $184,500), Medicare tax (1.45% + 0.9% above $200K), and state/local income taxes. Our calculator computes all of these automatically.

Which states have no income tax?

Nine states have no personal income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. However, some make up revenue through higher property taxes, sales taxes, or other fees.

Is a higher salary always better if I move states?

Not necessarily. A $100K salary in a low-cost, low-tax state can provide more purchasing power than $130K in a high-cost, high-tax state. Always compare take-home pay AND cost of living. Our salary equivalent calculator does this math for you.

What’s the difference between marginal and effective tax rate?

Your marginal rate is the tax rate on your last dollar earned (the bracket you’re in). Your effective rate is total tax divided by total income — the actual percentage you pay overall. The effective rate is always lower because your first dollars are taxed at lower brackets.

Do these calculators account for deductions?

Our calculators use the 2026 standard deduction ($16,100 single / $32,200 married). If you itemize deductions, your actual tax bill may be lower. Consult a tax professional for personalized advice.

How accurate are state tax estimates?

These are estimates based on top marginal rates and simplified effective rate calculations. Actual state taxes depend on specific bracket structures, deductions, credits, and local taxes. Use these for comparison purposes — consult a CPA for exact figures.

Capital Gains Tax: The Complete 2026 Strategy Guide

Capital gains tax is one of the few places in the US tax code where careful timing produces dramatically different outcomes. The same $100,000 gain can be taxed at 0%, 15%, 20%, 23.8%, or even 37% depending on your income, holding period, and what type of asset generated the gain. Most investors leave thousands of dollars on the table because they don't understand how the brackets stack — or they trigger short-term gains when a few extra weeks of holding would have qualified for long-term rates.

Short-Term vs Long-Term: The Critical Threshold

Capital gains are classified as short-term (held one year or less) or long-term (held more than one year). Short-term gains are taxed as ordinary income at your marginal rate — anywhere from 10% to 37% federally. Long-term gains qualify for preferential rates: 0%, 15%, or 20% depending on your taxable income.

The holding period starts the day after acquisition and includes the day of sale. Buy on March 15, 2025; sell on March 15, 2026 — that's exactly one year, classified as short-term. Sell on March 16, 2026 — one year and one day, qualifies as long-term. This single-day distinction can shift a $50,000 gain from being taxed at 32% ($16,000) to 15% ($7,500) — saving $8,500 with no other change.

The tax difference compounds across a portfolio. An active trader generating $200,000 in short-term gains pays roughly $50,000-$74,000 in federal tax. The same dollars realized as long-term gains pay $30,000-$48,000. Plus state tax in most states. The 'patience tax' — waiting an extra few weeks past the one-year mark — is one of the cheapest tax savings available.

Calendar discipline matters. Set reminders for the one-year anniversary of large purchases. Use brokerage tax-lot identification to specify which lots to sell when you have multiple purchase dates. Selling the wrong lot can accidentally trigger short-term treatment when you have eligible long-term lots in the same security.

How LTCG Brackets Actually Stack

The 0%/15%/20% LTCG brackets are based on total taxable income (ordinary income + capital gains), not just the gains themselves. For 2026, the 0% bracket covers taxable income up to $48,350 single / $96,700 married filing jointly. The 15% bracket extends to $533,400 single / $600,050 MFJ. Above those thresholds, gains are taxed at 20%.

The mechanics: ordinary income fills up the brackets first, then capital gains stack on top. If a single filer has $40,000 of ordinary income and $20,000 of LTCG, the first $8,350 of gains (filling the gap to $48,350) pays 0%, and the remaining $11,650 pays 15%. Effective rate on the gains: $1,748 / $20,000 = 8.7%.

If the same filer had $80,000 of ordinary income and $20,000 of LTCG, the entire $20,000 sits above the $48,350 threshold, fully in the 15% bracket. Tax: $3,000. The lesson: ordinary income matters as much as capital gains income when calculating LTCG tax.

The 20% bracket is rarely hit by middle-class investors but is a real factor for high earners. A married couple with $700,000 of total taxable income pays 20% on their LTCG. Above $750,000, they also face the 3.8% NIIT, pushing the effective rate to 23.8% federal — plus state tax. In California at the top bracket, total tax on long-term gains can exceed 37%.

Net Investment Income Tax: The Overlooked 3.8%

The Net Investment Income Tax (NIIT) adds 3.8% to net investment income for taxpayers with modified adjusted gross income over $200,000 single or $250,000 married filing jointly. The thresholds were set in 2010 and have never been indexed for inflation, so they catch a growing percentage of taxpayers each year.

NIIT applies to: interest, dividends, capital gains, rental income, royalties, non-qualified annuity distributions, and most passive business income. It does NOT apply to wages, self-employment income, qualified retirement plan distributions, active business income, or municipal bond interest.

The 3.8% applies to the LESSER of (a) net investment income or (b) MAGI minus the threshold. So if your MAGI is $210,000 and you have $50,000 of capital gains, NIIT applies only to $10,000 (the amount above $200K threshold), not all $50,000. Tax: $380. But if MAGI is $250,000 with $50,000 of gains, NIIT applies to the full $50,000. Tax: $1,900.

Strategic moves: harvest losses to offset gains and reduce net investment income, time gains across years to alternate between above-threshold and below-threshold years, use municipal bond income (NIIT-exempt) to fund consumption while letting taxable investments grow.

Tax-Loss Harvesting: Free Money You're Probably Leaving on the Table

Tax-loss harvesting is the practice of selling investments at a loss specifically to claim the loss for tax purposes. The losses offset capital gains dollar-for-dollar, then up to $3,000 of ordinary income, with any remainder carrying forward to future years indefinitely.

Concrete example: a portfolio has $40,000 of long-term gains and $25,000 of unrealized losses. Without harvesting, you pay 15% × $40,000 = $6,000. With harvesting, you sell the losers, realize $25,000 of losses, offset against gains. Net realized: $15,000. Tax: $2,250. Savings: $3,750.

Wash sale rules are the catch. You cannot buy back the same or substantially identical security within 30 days before or after the loss sale (a 60-day window total). The IRS disallows the loss if you violate the rule. The workaround: buy a similar but not identical security to maintain market exposure. Sell VOO (Vanguard S&P 500), buy SPY (SPDR S&P 500) — both track the S&P 500 but have different issuers.

Carryforward losses are a long-term asset. Net capital losses above $3,000 in a year carry forward indefinitely. After the 2022 stock decline, many investors have accumulated $50,000-$200,000 of carryforward losses that offset gains for years. These losses don't expire and follow you on future tax returns.

Real Estate Capital Gains: 1031 Exchanges and Primary Residence Exclusion

Real estate gains follow the same federal LTCG rates as stocks, but two specific tax breaks change the math: the primary residence exclusion and the Section 1031 like-kind exchange.

Primary residence exclusion: if you've owned and lived in your home as your primary residence for at least 2 of the last 5 years, you can exclude up to $250,000 of gain ($500,000 married filing jointly) from federal capital gains tax. This is a per-sale exclusion, available every 2 years, and applies regardless of what you do with the proceeds.

Section 1031 like-kind exchange: investment real estate can be exchanged for other investment real estate without recognizing the gain. The mechanics are strict — you must identify replacement property within 45 days and close within 180 days, and the exchange must use a Qualified Intermediary. The deferred gain becomes the basis of the new property, eventually recognized when that property is sold (or potentially eliminated through stepped-up basis at death).

Depreciation recapture is a separate issue. Real estate depreciation taken during ownership is recaptured at sale — taxed at 25% federally (special rate) on the depreciation portion, with the remaining gain at standard LTCG rates. A property with $200,000 of accumulated depreciation faces $50,000 of recapture tax even before considering the underlying gain.

Crypto Capital Gains: Special Considerations

The IRS treats cryptocurrency as property, not currency, for tax purposes. Every trade, swap, or use of crypto is a taxable event. Selling crypto for dollars: capital gain or loss. Trading Bitcoin for Ethereum: capital gain or loss on the Bitcoin. Using crypto to buy a coffee: capital gain or loss on the crypto.

Crypto wash sale rules currently DO NOT apply (as of 2026). Stocks are subject to the wash sale rule, but crypto is treated as property, so you can sell crypto at a loss and immediately repurchase the same coin. This makes crypto especially powerful for tax-loss harvesting. Multiple legislative attempts have tried to extend wash sale rules to crypto — assume this could change in future tax years.

Cost basis tracking is the operational challenge. The IRS requires First In First Out (FIFO) by default, but Specific Identification is allowed if you can document which lot you sold. For active traders moving between exchanges and wallets, basis tracking is brutal. Tools like CoinTracker, Koinly, or TaxBit pull transactions from exchanges and compute basis automatically. Manual tracking is essentially impossible for active crypto users.

DeFi creates additional complexity: providing liquidity, staking, yield farming, and lending all generate taxable events. Receiving rewards or interest in crypto is ordinary income at fair market value at receipt, which then becomes the basis for future capital gains calculations. This 'two-step' taxation catches many DeFi users by surprise.

QSBS Section 1202: The Largest Capital Gains Exclusion

Qualified Small Business Stock (QSBS) under Section 1202 is the largest capital gains tax break in the U.S. tax code. Up to $10 million (or 10x basis, whichever is greater) of capital gains from the sale of qualifying stock can be excluded from federal capital gains tax — entirely tax-free.

Requirements: the issuing company must be a domestic C-corporation, have less than $50 million in gross assets at the time of stock issuance, be in a qualified trade or business (most tech qualifies; many service businesses don't), and the stockholder must have acquired the shares at original issuance (not from a secondary buyer). The shares must be held for more than 5 years.

Real-world impact: a startup employee receives founder stock when the company has $5M in assets, holds for 6 years, then the company is acquired with their stake worth $20M. They can exclude $10M from federal tax, paying only on the remaining $10M. Federal savings: $1.5M-$2M depending on income level. Some states (notably California) don't conform to QSBS, so state tax may still apply.

Stacking strategy: gifts of QSBS to family members or trusts can multiply the per-person $10M exclusion. A founder gifting QSBS to a spouse and two trusts could potentially capture three separate $10M exclusions on the same company sale — $30M of gains excluded. The IRS scrutinizes these structures, but they're legal and used by sophisticated founders. Detailed estate planning is required.