Frequently Asked Questions

LevyIO is a free collection of tax calculators for individuals, freelancers, and small businesses. We cover income tax, self-employment tax, capital gains, payroll, and more. Every calculator uses current IRS rates and runs entirely in your browser with no sign-up required.

Yes, LevyIO is 100% free with no hidden fees, premium tiers, or paywalls. All calculators are available instantly without creating an account. We believe tax estimation tools should be accessible to everyone regardless of their financial situation.

Our calculators use official 2026 IRS tax brackets, standard deduction amounts, and current federal rates. Results are reliable estimates for planning purposes. However, actual tax liability depends on your complete financial picture, so always consult a qualified tax professional for filing.

No. All calculations happen locally in your browser. We never collect, store, transmit, or sell any financial data you enter. There are no cookies tracking your inputs, no accounts to worry about, and no data shared with third parties. Your privacy is fully protected.

The U.S. uses a progressive tax system with seven brackets (10%, 12%, 22%, 24%, 32%, 35%, 37%). Each bracket only applies to income within that range, not your entire income. For example, if you earn $50,000 as a single filer, only the amount above $47,150 is taxed at 22% while lower portions are taxed at 10% and 12%.

Your marginal tax rate is the bracket percentage applied to your last dollar of income. Your effective tax rate is the actual percentage of total income you pay in taxes. Effective rates are always lower than marginal rates because of progressive brackets. Someone in the 24% bracket might have an effective rate of only 15%.

Take the standard deduction ($15,000 single, $30,000 married filing jointly for 2026) unless your itemized deductions exceed it. Common itemized deductions include mortgage interest, state and local taxes (capped at $10,000), charitable contributions, and medical expenses above 7.5% of AGI. About 87% of filers use the standard deduction.

Your filing status determines your bracket thresholds, standard deduction, and eligibility for certain credits. Married filing jointly generally offers the widest brackets and largest deduction. Head of household provides better rates than single. Choosing the wrong status can cost hundreds or thousands of dollars in unnecessary taxes.

The AMT is a parallel tax system that prevents high-income taxpayers from using too many deductions to avoid taxes. It recalculates your tax without certain deductions like state and local taxes. The 2026 AMT exemption is $88,100 for singles and $137,000 for married couples. Most taxpayers are not affected after the 2017 tax reform.

Your employer withholds federal income tax each pay period based on your W-4 form selections. The amount depends on your filing status, number of dependents, and any additional withholding you request. If too much is withheld you get a refund; too little means you owe at filing. Adjust your W-4 to get closer to breaking even.

Self-employment tax is 15.3% of your net self-employment income (12.4% Social Security + 2.9% Medicare). You can deduct half of the SE tax from your adjusted gross income. Social Security tax applies only to the first $176,100 of combined wages and SE income in 2026. Medicare has no cap and adds 0.9% above $200,000.

If you expect to owe $1,000 or more in taxes after subtracting withholding and credits, you must pay quarterly estimated taxes. Due dates are April 15, June 15, September 15, and January 15. Missing payments triggers underpayment penalties. Use Form 1040-ES or IRS Direct Pay to submit quarterly payments.

Common deductible business expenses include home office costs, vehicle mileage (72.5 cents per mile in 2026), internet and phone bills, software subscriptions, professional development, health insurance premiums, and office supplies. Expenses must be ordinary and necessary for your business. Keep detailed records and receipts for all deductions.

S-Corp election can save self-employment tax if your business earns above roughly $50,000-$60,000 in net profit. As an S-Corp, you pay yourself a reasonable salary (subject to payroll tax) and take remaining profits as distributions (no SE tax). However, S-Corps require payroll processing, additional filings, and more bookkeeping complexity.

The QBI deduction (Section 199A) allows eligible self-employed individuals and pass-through business owners to deduct up to 20% of qualified business income from their taxable income. Phase-outs begin at $191,950 for single filers and $383,900 for married filing jointly. Specified service businesses face additional limitations above these thresholds.

Short-term capital gains apply to assets held one year or less and are taxed at your ordinary income tax rate (up to 37%). Long-term capital gains apply to assets held longer than one year and are taxed at preferential rates of 0%, 15%, or 20% depending on your taxable income. Holding investments longer can significantly reduce your tax bill.

Cryptocurrency is treated as property by the IRS. Selling, trading, or spending crypto triggers a taxable event. Gains follow the same short-term and long-term capital gains rules as stocks. You must track your cost basis for every transaction. Receiving crypto as payment is taxed as ordinary income at fair market value.

Tax-loss harvesting involves selling investments at a loss to offset capital gains and reduce your tax bill. You can deduct up to $3,000 of net capital losses against ordinary income per year, carrying excess losses forward. The wash-sale rule prevents repurchasing substantially identical securities within 30 days before or after the sale.

Qualified dividends from U.S. corporations held for at least 60 days are taxed at long-term capital gains rates (0%, 15%, or 20%). Non-qualified (ordinary) dividends are taxed at your regular income tax rate. Most dividends from major U.S. companies are qualified. REITs and foreign company dividends are generally non-qualified.

The 2026 federal estate tax exemption is $15 million per person ($30 million for married couples). Estates above this threshold are taxed at rates up to 40%. The annual gift tax exclusion is $19,000 per recipient. Gifts above this reduce your lifetime estate tax exemption but rarely trigger immediate tax for most people.

A Roth conversion makes sense when your current tax rate is lower than your expected future rate, such as during a low-income year, early retirement, or before Required Minimum Distributions begin. You pay taxes on the converted amount now but enjoy tax-free growth and withdrawals later. Consider converting gradually to avoid jumping tax brackets.

Marriage can create a tax bonus or penalty depending on income disparity. Couples with one high earner and one low earner typically benefit from wider brackets and a larger standard deduction. Two similar high earners may face a marriage penalty where combined income pushes them into higher brackets than if they filed separately.

Nine states have no income tax (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming). Remote workers may be able to relocate for savings. Other strategies include maximizing retirement contributions, using 529 plans with state deductions, and timing income recognition. Always verify residency rules carefully.

Traditional 401(k) and IRA contribution limit of $7,000 ($8,000 if age 50+). Someone in the 24% bracket saves $5,640 in taxes by maxing out their 401(k). This is one of the most powerful tax reduction strategies available.

Track all business expenses meticulously, including mileage, home office, equipment, and supplies. Set aside 25-30% of income for taxes and make quarterly estimated payments. Consider opening a SEP-IRA or Solo 401(k) to shelter income. If net profit exceeds $50,000, evaluate S-Corp election to reduce self-employment tax.

Start with the Income Tax Calculator for a complete federal tax estimate. If you are self-employed, follow up with the Self-Employment Tax calculator. For investment income, use the Capital Gains Tax calculator. The Effective Tax Rate calculator shows your true tax burden across all income types combined.

Our calculators provide reliable estimates using current IRS rates and formulas. They are excellent for planning, budgeting, and understanding your tax situation. However, they cannot replace professional tax preparation software or a CPA because they do not account for every possible credit, deduction, or special circumstance in your return.

LevyIO calculators are designed for estimation and education, not for filing tax returns. Use our results to understand your tax liability, plan withholdings, and make informed financial decisions. For actual filing, use IRS-approved tax preparation software or work with a licensed tax professional who can review your complete situation.