What are the 2027 federal tax brackets?+
The IRS has not yet published official tax-year-2027 brackets — those figures are expected around October 2026. This calculator uses the latest IRS-confirmed schedule instead: the tax-year-2026 brackets from Revenue Procedure 2025-32, which govern the return most filers submit in early 2027. Those seven rates are 10%, 12%, 22%, 24%, 32%, 35%, and 37%, and for a single filer the 22% bracket begins at $50,400 of taxable income. Brackets shift upward by roughly 2-3% each year for inflation, so when the IRS releases the 2027 figures, expect each threshold to land slightly above its 2026 counterpart rather than change dramatically. Until that publication, treating the 2026 brackets as your working numbers for the return you file in 2027 is accurate — they are the same return, just described by the calendar year the income was earned in versus the year the paperwork is filed.
What is the difference between marginal and effective tax rate?+
Your marginal tax rate is the rate charged on your last dollar of taxable income — effectively your highest bracket — while your effective tax rate is the average rate you pay across all your income once every lower bracket is factored in. Under the progressive system the IRS uses (10% through 37% for tax year 2026, per Revenue Procedure 2025-32), only the income inside each bracket is taxed at that bracket's rate, so your effective rate is always lower than your marginal rate. For example, a single filer with $90,000 of taxable income sits in the 22% marginal bracket, but because the first $11,925 is taxed at 10%, the next portion at 12%, and so on, their actual effective rate lands closer to 15-16% of total taxable income. Use your marginal rate to judge the tax cost of one more dollar earned; use your effective rate to judge your overall burden.
What is the self-employment tax rate?+
The self-employment tax rate is 15.3% of net self-employment earnings, made up of 12.4% for Social Security and 2.9% for Medicare, and it applies to 92.35% of your net earnings rather than the full amount. That 92.35% adjustment exists because a traditional employee's payroll tax is split evenly between employee and employer, and the IRS lets self-employed filers approximate the same treatment by deducting the employer-equivalent half before calculating the tax base. For tax year 2026 (IRS Revenue Procedure 2025-32), the 12.4% Social Security portion applies only up to the $184,500 wage base, while the 2.9% Medicare portion applies to all self-employment income with no ceiling. A freelancer with $80,000 in net self-employment income owes roughly $11,300 in SE tax before any deductions — a substantial bill that quarterly estimated payments are designed to spread out rather than owe as one lump sum in April.
Can I deduct self-employment tax?+
Yes — you can deduct half of your self-employment tax, the portion that mirrors what an employer would otherwise pay, as an above-the-line adjustment when calculating your adjusted gross income. This deduction is available whether or not you itemize, and it directly lowers the income your federal tax bracket is applied to, though it does not reduce the self-employment tax itself. For example, a filer who owes $11,000 in total SE tax can deduct $5,500 from their gross income before their income tax bracket is calculated. This calculator applies that deduction automatically when estimating your total tax liability, so the number you see already reflects the lower, adjusted taxable income rather than requiring you to subtract it yourself. Keep track of this deduction separately from business expense deductions — it's calculated from the SE tax itself, not from your revenue or costs.
