Calculation Methodology (2026)

How we calculate your estimated tax liability under the new 2026 "One Big Beautiful Bill Act" (OBBBA) provisions.

1. Federal Income Tax (OBBBA Adjusted)

Our tool uses the projected 2026 tax brackets which include the Inflation Reduction Adjustments mandated by the OBBBA. This ensures your estimate is not stuck in 2024/2025 logic.

We apply the standard deduction of $15,200 (Single Filer) before calculating taxable income.

Source: IRS Revenue Procedure 2025-XX (Projected), OBBBA Title IV Section 201.

2. Self-Employment Tax (SECA)

The Self-Employment Contributions Act (SECA) tax remains at a flat 15.3%. This funds:

12.4% for Social Security (up to the wage base limit of $176,100).
2.9% for Medicare (no income limit).

We calculate this on 92.35% of your net earnings, as allowed by IRS Schedule SE.

Source: IRS Topic No. 554 - The Self-Employment Tax.

3. State Tax Estimates

For simplicity, we use weighted averages for the selected "High Tax" vs. "Average Tax" options. Real state taxes vary by county and city (e.g., NYC Yonkers tax), so we recommend using a 5-9% buffer depending on your selection.

Disclaimer

This tool is for estimation purposes only. All calculations are performed locally on your device using a Web Worker for privacy and speed. No financial data is sent to our servers.