Effective Tax Rate Calculator 2026
Your real tax rate — not just the bracket you're in.
See effective vs marginal, how each income type is taxed, and your state burden.
Assets held >1 year — taxed at 0%, 15%, or 20%
Assets held ≤1 year — taxed as ordinary income
Same preferential rates as long-term capital gains
Rental income, alimony, retirement distributions, etc.
Effective Rate vs Marginal Rate — Why It Matters
The most common tax misunderstanding: "I just got a raise that pushed me into the 22% bracket — now I'll take home less." That's not how progressive taxation works.
The US federal income tax system is marginal: each bracket rate only applies to income within that bracket, not to all your income. If you're single and earn $55,000 in 2026, only the income above $48,475 is taxed at 22%. Everything below is taxed at 10% or 12%.
Your effective tax rate is what you actually pay as a percentage of your total income. It smooths across all brackets and is always lower than your marginal rate (unless all your income falls in the 10% bracket).
Capital Gains and the Stacking Rule
Long-term capital gains and qualified dividends are taxed at 0%, 15%, or 20% — but they "stack on top of" ordinary income for purposes of determining which rate applies. Your ordinary income fills the lower brackets first; your capital gains sit on top and are taxed at the preferential rate that matches where they land.
Related: Payroll Tax Calculator · W-4 Withholding Calculator · Self-Employment Tax Calculator
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