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.

Military Tax Benefits: Combat Zone Exclusion, BAH, and State Residency Strategy

Service members and military veterans receive tax benefits no civilian gets. Combat zone exclusions can make significant portions of military pay entirely tax-free. The Servicemembers Civil Relief Act and Military Spouses Residency Relief Act let you maintain a 'state of legal residence' regardless of where you're stationed — providing strategic flexibility unavailable to civilians. Extended filing deadlines, retirement plan rules, and dozens of state-specific exemptions create planning opportunities. This guide covers the framework most CPAs without military experience miss.

The Combat Zone Tax Exclusion

The single most valuable military tax benefit: pay earned while serving in a designated combat zone is excluded from federal income tax. For enlisted members and warrant officers, the exclusion is unlimited. For commissioned officers, it's capped at the highest enlisted rate plus imminent danger/hostile fire pay (about $9,500/month in 2026).

Designated combat zones include Afghanistan, Iraq, Syria, Yemen, Somalia, parts of Saudi Arabia, the Arabian Sea, the Gulf of Aden, the Persian Gulf, and several other regions. Eligibility requires service IN the zone, not just deployment elsewhere supporting it.

Concrete example: an E-7 sergeant deployed to Afghanistan for 8 months earns approximately $58K of base pay plus $14K of imminent danger and family separation pay over those months. Without combat zone exclusion: roughly $11K of federal income tax on this income. With CZTE: $0 federal tax on the $72K. Plus that income doesn't count toward IRA contribution limits, doesn't show on W-2 Box 1, and is excluded from earned income for tax purposes.

Strategic implications: combat-deployed service members can do massive Roth conversions during deployment years (their other taxable income is artificially low). They can realize capital gains in the 0% bracket. They can fund Roth IRAs even with limited civilian wages because CZTE income still counts as earned income for IRA contributions (special rule).

Imminent danger and hostile fire pay are also excluded. Even short deployments to combat-adjacent areas can trigger partial month exclusions. The math compounds across multi-year deployments to substantial wealth-building opportunities.

BAH and BAS: Tax-Free Allowances

Basic Allowance for Housing (BAH) and Basic Allowance for Subsistence (BAS) are excluded from taxable income — both federal and state. For active-duty members, this represents 20-40% of total compensation depending on rank, location, and dependents.

Concrete example: an E-6 stationed in San Diego with dependents receives approximately $4,800/month in BAH plus $460/month in BAS — about $63K/year of tax-free housing and subsistence allowances. The same E-6's base pay of approximately $58K is taxable. So total compensation: $121K, but only $58K (48%) is on the W-2. Effective tax rate on total comp: dramatically lower than civilians earning equivalent gross.

Mortgage qualification: lenders typically gross up BAH and BAS for qualifying purposes (since the allowances are tax-free). A service member with $60K base pay + $50K BAH/BAS qualifies for mortgages similar to a civilian earning $130K-$140K of taxable income.

VA loans add another layer of benefits: 0% down payment options, no PMI, lower interest rates than conventional. Combined with tax-free BAH covering most or all of housing payment, military families can build housing equity dramatically faster than civilian counterparts.

Strategic note: BAH varies by location. Service members can sometimes optimize by choosing assignments with high BAH locations (Hawaii, San Francisco, DC) but lower-cost actual housing. The differential becomes additional disposable income.

State of Legal Residence (SLR)

The Servicemembers Civil Relief Act (SCRA) lets military members maintain their State of Legal Residence (SLR) regardless of where they're stationed. So a service member from Florida who's stationed in California, Hawaii, and Germany over a 20-year career can keep Florida as their SLR throughout — paying no state income tax even while physically present in California.

This is a unique benefit civilians don't have. A civilian working in California for 5 years is a California resident, period. A military member can be stationed in California for 5 years and remain a Florida resident.

Strategic SLR establishment: many service members establish SLR in no-income-tax states like Florida, Texas, or Nevada early in their career. Once established (driver's license, voter registration, vehicle registration in that state), the SLR persists through subsequent assignments anywhere.

Caveat: military spouses had to physically reside in a state to establish residency until the Military Spouses Residency Relief Act (MSRRA) — now spouses can also keep SLR matching the service member's. Combined, both spouses can maintain Florida residency despite years stationed in California.

Limitations: SLR doesn't extend to civilian moonlighting income. If a service member has a side business or off-duty job, that income may be subject to the duty-station state's tax. Investment income from rental property in another state is subject to that state's nonresident filing requirements.

Thrift Savings Plan (TSP) Optimization

The TSP is the federal employee/military equivalent of a 401(k). Contribution limits in 2026: $23,500 ($31,000 with age 50+ catch-up). Service members participating in the BRS (Blended Retirement System) also receive automatic 1% agency contribution plus matching up to 4% of basic pay = 5% potential 'free money.'

TSP fund options: G Fund (government securities), F Fund (bond), C Fund (S&P 500 equivalent), S Fund (small/mid-cap), I Fund (international), and Lifecycle Funds. Expense ratios are extremely low — typically 0.04-0.07%, dramatically lower than commercial 401(k) options.

Roth TSP option: contribute after-tax dollars for tax-free retirement growth. Combined with combat zone exclusion, this is uniquely powerful — you can contribute Roth dollars from CZTE pay, getting both the up-front exclusion AND tax-free Roth growth. No civilian retirement vehicle replicates this triple advantage.

Concrete example: a deployed E-5 contributes $20K to Roth TSP from combat zone pay during deployment. The $20K wasn't taxed (CZTE), it goes into Roth (tax-free growth and withdrawal), and qualifies for matching contributions. Net: $20K plus matching plus 30+ years of tax-free growth. Equivalent civilian contribution: $20K of taxed income, into Roth (tax-free growth). The military version saves the upfront tax (typically 22% × $20K = $4,400) entirely.

Post-service rollover: TSP can be rolled to IRA, Roth IRA, or new employer's 401(k). Many veterans roll TSP balances to IRAs for greater investment flexibility (TSP fund options are limited).

Filing Deadlines and Extensions

Service members in combat zones get automatic 180-day extensions for filing tax returns and paying tax. The extension runs from the last day in the combat zone, not from April 15. So a service member returning from a 12-month deployment in October has until early April of the following year to file the previous year's return.

Deployed service members also get automatic extensions on contribution deadlines (IRA, HSA, retirement plans) and various other tax-related deadlines. The IRS Office of Combat Zone reviews and provides specific deadline relief for affected service members.

State extensions: some states match federal combat zone provisions, others have their own rules. Service members should check state-specific guidance for the duty station and SLR states.

Penalty relief: even when service members owe tax, combat-related penalty relief is available for failure-to-pay penalties. The IRS doesn't require interest forgiveness in most cases, but penalties can be waived.

Practical advice: deployed service members shouldn't panic about tax filing. Get a power of attorney to a trusted civilian (often a spouse, parent, or military legal assistance) to handle filings. Or take advantage of the automatic extensions and file when you return.

VA Disability Benefits and Tax Treatment

VA disability compensation is entirely tax-free at both federal and state levels. This is significant for veterans receiving disability ratings — a 100% rating in 2026 provides approximately $42K-$50K/year of completely tax-free income (varies by dependents).

Concurrent Receipt (CRDP/CRSC): military retirees with combat-related disability can receive both military retirement AND VA disability without the previous offset. The VA portion is tax-free; the retirement portion is taxable.

Combat-Related Special Compensation (CRSC): for combat-related disabilities, a portion of military retirement pay is recharacterized as CRSC, becoming tax-free. Different from CRDP and requires combat-specific origin of disability.

Strategic implications: veterans with significant disability ratings have substantial tax-free income. Combined with military retirement (which is taxable), VA disability often allows veterans to live comfortably with relatively modest taxable income. Some veterans defer Social Security to age 70 because their VA disability covers basic expenses without requiring SS in earlier years.

Disability rating optimization: the VA disability claims process is complex. Service members and veterans should file disability claims for ALL service-connected conditions, even seemingly minor ones. The cumulative impact on rating percentage (and resulting tax-free income) can be substantial.

Military Spouse Considerations

MSRRA (Military Spouses Residency Relief Act) lets military spouses maintain their state of legal residence regardless of where they're stationed. This applies to spouses' wages and other income — providing the same SLR flexibility as the service member.

Spousal employment: military spouses face high unemployment due to frequent moves. Tax provisions partially compensate: the Earned Income Tax Credit, dependent care credit, and various state tax exemptions for military spouses provide some relief.

Spouse education benefits: My Career Advancement Account (MyCAA) provides up to $4,000 in tuition assistance for military spouses pursuing certifications and licenses. The benefit is excluded from taxable income.

Survivor benefits: Survivor Benefit Plan (SBP) annuities to military spouses are taxable as ordinary income. Dependency and Indemnity Compensation (DIC) is tax-free. Coordination between SBP and DIC is complex; many surviving spouses underutilize available benefits.

Divorce considerations: military divorces involve unique elements. Disability pay is not divisible in divorce (under USFSPA). Military retirement pay can be divided per state law. SBP can be elected for an ex-spouse. Coordinating tax aspects of military divorce requires military-specific expertise.