Methodology

Last updated: May 12, 2026

This page documents the data sources, formulas, and simplifying assumptions used by every calculator on TakeHomeTax. Our goal is transparency: you should be able to reproduce any of our results from public data and the methodology described here.

Federal Income Tax

Federal income tax is calculated using the official 2026 brackets published by the IRS in Revenue Procedure 2025-11 (and Rev. Proc. 2024-40 for the 2025 tax year). For each filer status:

• Start with gross income
• Subtract the standard deduction ($16,100 single / $32,200 married filing jointly for 2026)
• Apply seven brackets (10%, 12%, 22%, 24%, 32%, 35%, 37%) to the resulting taxable income

We do NOT account for: itemized deductions other than the standard deduction, dependents/Child Tax Credit, education credits, EITC, AMT (except in the dedicated AMT Trigger Calculator), or other personal credits/deductions. Our headline number is approximately the tax a single filer with no dependents or itemized deductions would owe.

FICA (Social Security + Medicare)

For 2026:

• Social Security: 6.2% on the first $184,500 of wages
• Medicare: 1.45% on all wages (no cap)
• Additional Medicare Tax: 0.9% on wages above $200,000 (single / MFJ — same threshold, not indexed)

For 2025 tax year, the Social Security wage base is $176,100.

State Income Tax

State tax calculations use the top marginal rate for each state, with a simplified effective-rate adjustment. Specifically:

• Flat-tax states (e.g., Pennsylvania, Indiana, North Carolina): the stated rate is the effective rate. We multiply income by the rate.
• Graduated-tax states (e.g., California, New York, Oregon): we apply the top marginal rate times an effective-rate adjustment factor (approximately 65%) to account for lower brackets and the state-level standard deduction. This is an approximation, not a full bracket-by-bracket calculation.
• No-income-tax states (AK, FL, NV, NH, SD, TN, TX, WA, WY): state income tax is $0.

Source data: state revenue authority websites, the Tax Foundation's annual state tax data, and confirmed legislative updates. We track rate changes for all 50 states.

Important: our state tax estimate may differ from a precise bracket-by-bracket calculation by several percentage points, particularly at lower incomes where graduated states tax less aggressively. For an exact state tax calculation, use your state's official tax tables or a tax preparation tool.

City and Local Tax

We provide dedicated city-tax calculator pages for 46 cities with local income taxes. Each city implementation reflects that city's specific mechanism:

• NYC: graduated brackets from 3.078% to 3.876%
• Philadelphia: flat resident wage tax (~3.75%) and non-resident wage tax (~3.44%)
• Yonkers: 16.75% surcharge on New York state tax for residents
• Portland metro: Multnomah County Preschool for All (1.5% over $125K, 3% over $250K) plus Metro Supportive Housing Services (1% over $125K)
• Ohio cities: flat municipal income tax (1–3%) with credits for taxes paid to other Ohio cities
• Maryland: piggyback county tax on state tax (2.25–3.2%)
• Other cities: typically flat rate

For the main state-level calculator, we do NOT automatically include local taxes — they vary too much within a state to estimate accurately without a city selection.

OBBBA Tax-Free Overtime

The One Big Beautiful Bill Act (signed July 4, 2025) introduced a federal exclusion for overtime premium pay through 2028. Our Overtime Tax Calculator implements:

• Exclusion up to $12,500 single / $25,000 married filing jointly per year
• Phase-out beginning at $150,000 single / $300,000 MFJ MAGI
• Applied only to the overtime premium portion (half-time over base rate), not full OT pay
• Applied only to federal income tax (FICA and state still apply)
• Available only to FLSA-covered W-2 employees

Cost of Living

State-level cost of living indices are sourced from the U.S. Bureau of Economic Analysis Regional Price Parities, with 100 representing the national average. City-level COL would require additional data and is not currently implemented.

Salary Data

Career-by-state salary estimates are derived from BLS Occupational Employment and Wage Statistics, adjusted for state cost-of-living and historical state-level wage data. These are estimates, not precise figures, and may not reflect your specific employer or industry.

What Our Calculators Do NOT Account For

• Itemized deductions vs. standard deduction comparison (except in dedicated tools)
• Dependents and Child Tax Credit (except in the W-4 calculator and tax refund estimator)
• Specific business deductions, depreciation, or QBI calculations (except in dedicated tools)
• State-level deductions and credits beyond what the effective-rate adjustment captures
• Alternative Minimum Tax (except in the AMT Trigger Calculator)
• Estimated tax safe harbor calculations (covered separately in the Quarterly Tax Estimator)
• Specific tax situations like multi-state filing, foreign income, or self-employment SE tax interactions (covered in dedicated tools)

Update Schedule

Federal data: updated annually each November when the IRS releases new inflation-adjusted figures for the next tax year. State data: updated within weeks of any state law change. City data: reviewed annually and updated when local authorities publish rate changes.

Disclaimers

Our calculators are educational tools. They produce reasonable estimates for most situations but are not a substitute for professional tax preparation. For your actual tax liability, refer to your tax preparation software output, or work with a CPA, enrolled agent, or other licensed tax professional. See our full disclaimer.