Marginal tax rate calculator

By Tom, CPA · Updated October 27, 2026

TL;DR: Your tax bracket and your true marginal rate are not always the same. This calculator uses 2026 federal brackets and the standard deduction to show your bracket, the actual extra tax on the next chunk of income, and your effective rate. If you have qualified dividends or long-term gains, extra ordinary income can push them out of the 0% zone, creating a hidden 27% rate inside the 12% bracket.

Educational only, not tax, legal, or investment advice. Examples are illustrations, not predictions. Rules and limits change; verify current figures and talk to a qualified professional about your situation.

"I'm in the 22% bracket" is the most confidently wrong sentence at every barbecue. Your bracket is the rate on the last dollar of ordinary income, sure. But if you have capital gains, a bonus can cost far more than your bracket suggests, and benefit phase-outs pile on more. The number that matters for decisions (Roth conversion, side gig, extra 401(k) contributions) is the tax on the next dollar, all-in.

Enter your income below. The calculator uses 2026 brackets from Rev. Proc. 2025-32 and includes the 3.8% net investment income tax. Background: marginal vs. effective tax rate.

CPA Warning Label: Federal income tax and NIIT only. It ignores state tax, payroll tax, credits, Social Security taxation, ACA credits and IRMAA, which can all raise your real marginal rate a lot.

How to use it

• Filing status: 1 for single, 2 for married filing jointly.
• Ordinary income: wages, interest, non-qualified dividends, IRA withdrawals, pensions and net business income, before the standard deduction. Subtract pre-tax 401(k) and HSA contributions first.
• Qualified dividends and long-term gains: from your brokerage statements.
• Extra deductions: amounts beyond the standard deduction of $32,200 joint or $16,100 single, such as the age-65 additional amount, the $6,000 senior deduction or itemized deductions over the standard amount.
• Extra income to test: a bonus, conversion or side income. Default $1,000.

Why the true rate can beat your bracket

Qualified dividends and long-term gains sit on top of ordinary income. The 0% rate applies up to $98,900 of joint taxable income ($49,450 single) for 2026. Add $1,000 of ordinary income when you are in that zone, and you pay 12% on the $1,000 plus 15% on $1,000 of gains that just got pushed above the line. That's 27%. Other hidden rates come from the NIIT (3.8% once MAGI passes $250,000 joint or $200,000 single, not indexed), and from phase-outs this tool does not model, like the senior deduction and the tips and overtime deductions. Read more in hidden marginal tax rates.

Illustration

Ana and Ben, married, have $120,000 of ordinary income and $20,000 of qualified dividends. Taxable income: $107,800. Ordinary taxable income is $87,800, in the 12% bracket. The first $11,100 of dividends fits under $98,900 at 0%, and the other $8,900 is taxed at 15%. Total tax: $11,375.

They're thinking about a $1,000 Roth conversion. Their bracket says 12%, or $120. The calculator says $270, a 27% marginal rate, because $1,000 more of dividends crosses into the 15% zone. The conversion might still make sense, but at 27% they should compare against their expected retirement rate instead of the headline 12%. Run that comparison in the Roth conversion calculator.

What it includes and leaves out

Interest and non-qualified dividends also count toward NIIT; the tool only counts the gains you enter, so it can understate NIIT. Self-employed? Add 15.3% self-employment tax on most of each extra dollar; see the self-employment tax calculator.

Using your marginal rate

• Pre-tax vs. Roth: contribute pre-tax when today's marginal rate beats your expected retirement rate.
• Savings rate: each pre-tax dollar saved costs you less than a dollar of take-home; see savings rate and years to FIRE.
• Bonus or side gig: multiply the extra income by the true marginal rate (plus state and payroll tax) and set aside that much, so April isn't a surprise.
• Gain harvesting: if your rate on extra ordinary income is 27%, your dividends are sitting at the 0% line. Realizing more gains will cost 15%, so harvest only up to the threshold.
• Withdrawal planning: sequence withdrawals to keep the marginal rate low, alongside safe withdrawal rate research.

More tools on the calculators page.