Federal Income Tax Calculator

If your total itemized deductions exceed the standard deduction, you file Schedule A (Form 1040). The major categories for 2026 include:

• State and Local Tax (SALT) deduction: Capped under IRC Section 164 as amended by OBBBA at $40,000 for 2025 and $40,400 for 2026 ($20,000/$20,200 MFS), rising 1% per year through 2029 and reverting to $10,000 in 2030. Includes state income tax (or sales tax) plus property taxes. The cap phases down by 30% of MAGI above $500,000 (2025) / $505,000 (2026), but never below $10,000.
• Mortgage interest: Deductible on up to $750,000 of acquisition debt ($375,000 MFS) under IRC Section 163(h). Home equity loan interest is deductible only if the loan was used to "buy, build, or substantially improve" the home.
• Charitable contributions: Cash donations deductible up to 60% of AGI for public charities. Non-cash property donations are limited to 30% of AGI. Excess carries forward 5 years. Donations over $250 require written acknowledgment; donations of property over $5,000 require a qualified appraisal.
• Medical expenses: Deductible only for the amount exceeding 7.5% of AGI. At $100,000 AGI, the first $7,500 of medical costs provides zero deduction.

The bunching strategy involves concentrating two years of charitable giving or other itemized deductions into a single year to exceed the standard deduction threshold, then taking the standard deduction in the alternate year.

The Alternative Minimum Tax (AMT) under IRC Section 55 is a parallel tax system that adds back certain deductions and applies a flat rate of 26% (28% on AMTI above $244,500, or $122,250 MFS, for 2026). For 2026, the AMT exemption is $90,100 (single) / $140,200 (MFJ) per Rev. Proc. 2025-32. Under OBBBA the exemption phases out at 50 cents per dollar above $500,000 (single) / $1,000,000 (MFJ). Common AMT triggers include large SALT deductions, exercise of incentive stock options (ISOs), and accelerated depreciation.

The Child Tax Credit under IRC Section 24 provides $2,000 per qualifying child under age 17, with a refundable portion up to $1,700 per child (Additional Child Tax Credit). The credit phases out by $50 for each $1,000 of AGI above $200,000 (single) or $400,000 (MFJ). A qualifying child must have a valid SSN issued before the return due date.

The tax computation follows this sequence: Gross Income minus above-the-line deductions = AGI (Line 11); AGI minus standard or itemized deduction = Taxable Income (Line 15); apply tax brackets = Tax before credits; subtract nonrefundable credits = Tax after credits; add other taxes (SE tax, AMT) = Total Tax (Line 24).