Federal Income Tax Calculator

How federal tax brackets actually work

The single most-misunderstood number in personal finance is the federal tax bracket. People hear “I'm in the 22% bracket” and assume 22% of their income gets taken. That's not how it works, and the misunderstanding costs real decisions — over-withholding from raises, panicking about side income, turning down bonuses because “they'll just tax it more anyway.”

Brackets are marginal. Each rate only applies to the dollars inside that band. Your effective rate — what you actually paid divided by what you earned — is almost always meaningfully lower than your top marginal rate.

For 2025, the brackets and standard deductions look like this. The standard deduction amounts below reflect the post-OBBBA numbers (the One Big Beautiful Bill Act signed July 4, 2025 retroactively raised them above the original Rev. Proc. 2024-40 figures):

• Standard Deduction (2025): Single/MFS $15,750 · MFJ $31,500 · HoH $23,625
• Standard Deduction (2026): Single/MFS $16,100 · MFJ/Surviving Spouse $32,200 · HoH $24,150
• Single (2025 brackets): 10% to $11,925 · 12% to $48,475 · 22% to $103,350 · 24% to $197,300 · 32% to $250,525 · 35% to $626,350 · 37% above
• MFJ (2025 brackets): 10% to $23,850 · 12% to $96,950 · 22% to $206,700 · 24% to $394,600 · 32% to $501,050 · 35% to $751,600 · 37% above
• HoH (2025 brackets): 10% to $17,000 · 12% to $64,850 · 22% to $103,350 · 24% to $197,300 · 32% to $250,500 · 35% to $626,350 · 37% above

Source: IRS Rev. Proc. 2024-40, as amended by the OBBBA (Pub. L. 119-21).

Pre-tax deductions federal employees should stack

The fastest way to cut a federal tax bill is to move dollars out of your AGI before the brackets get applied. Federal employees have more pre-tax levers than most W-2 workers, and most don't use all of them.

Traditional TSP: $23,500 elective deferral in 2025. Age 50+ catch-up adds $7,500, so $31,000 total. The SECURE 2.0 “super catch-up” for ages 60–63 raises that catch-up to $11,250 instead of $7,500 — pushing the ceiling for that four-year window to $34,750. That super catch-up went into effect Jan 1, 2025 and a lot of feds in that age band still don't know it exists.

FEHB Premiums: Automatically pre-tax through Premium Conversion if you're an active federal employee. No opt-in, no form. It shaves your taxable income by your full annual premium. Retirees lose this — their FEHB premiums come out of after-tax pension dollars, which is one of the underrated reasons people stay on the rolls past 60.

FSAFEDS: Health Care FSA up to $3,300 in 2025 with a $660 carryover. Dependent Care FSA capped at $5,000 per household ($2,500 MFS) — that ceiling jumps to $7,500/$3,750 in 2026 under OBBBA, the first real increase to the dependent care cap in 40 years.

HSA: Only if you're enrolled in a qualifying HDHP. For 2025: $4,300 self-only, $8,550 family, plus $1,000 catch-up at age 55+. Most feds default to a non-HDHP FEHB option and skip the only triple-tax-advantaged account in the code. Worth modeling.

TSP mechanics in detail at /tsp-guide. Premium Conversion and FEHB plan selection at /fehb-guide.

Retirement tax planning for FERS retirees

FERS pension is taxable as ordinary income at the federal level. There's no special bucket — it shows up on a 1099-R, flows onto the 1040, and hits the same brackets your salary used to. Technically a sliver is tax-free return of your after-tax FERS contributions, recovered via the Simplified Method (IRS Pub 721) — small relative to the gross payment, but it does reduce the taxable portion year by year until basis is fully recovered.

Traditional TSP withdrawals are taxable the same way. Roth TSP withdrawals come out tax-free if qualified — held five years and you're 59½+. Most feds retire with both buckets and have to manage the withdrawal mix to keep ordinary income inside a target bracket.

Social Security has its own formula. “Combined income” — AGI plus nontaxable interest plus half your SS benefit — determines how much of the benefit becomes taxable. Cross $25,000 single / $32,000 MFJ and up to 50% of the benefit gets pulled in. Cross $34,000 / $44,000 and the cap rises to 85%. Those thresholds aren't indexed and haven't moved since 1993, which is why more retirees get caught every year.

One OBBBA addition worth knowing for federal and military retirees: the senior bonus deduction stacks an additional standard-deduction amount on top of the regular figure for taxpayers 65 and older. Verify the current amount and phase-out thresholds before relying on it — these were set in the 2025 bill and may evolve.

State tax varies wildly. See /retirement-tax-by-state.

Tax bracket creep in retirement

The trap most retirees walk into: planning built around the assumption that retirement income would be lower than working income. For higher-grade federal employees, it often isn't.

Stack a FERS pension, traditional TSP withdrawals, Social Security, and maybe a working spouse — and the total can land you in the same bracket you were in mid-career, sometimes higher. RMDs make it worse. Under SECURE 2.0, traditional TSP RMDs start at age 73 (rising to 75 for those born in 1960 or later). The TSP doesn't ask if you want the money. It sends it.

One strategy that comes up a lot in federal-employee planning is the Roth conversion ladder — moving traditional TSP or IRA dollars into Roth during the lower-income gap between separation and RMD age, paying tax now at a known rate to avoid higher tax (and IRMAA brackets) later. Whether the math works depends on your projected brackets, state of residence, and Medicare exposure. It's a strategy worth modeling, not a recommendation that fits everyone. Run real numbers before you act.