Our Methodology

TaxScenario provides interactive tax calculators that estimate your federal and state tax burden. We use official IRS tax brackets and state tax data so you can model the financial impact of any decision before you make it. This is not tax advice — it is a calculation tool.

Data Sources

• IRS Revenue Procedures — Federal income tax brackets, standard deduction amounts, FICA rates, and capital gains rates are sourced directly from annual IRS publications (Revenue Procedure for inflation adjustments). We implement the 2025 tax year values.
• State Tax Agencies — State income tax brackets, rates, and standard deductions are sourced from each state's department of revenue or taxation. We cover all 50 states plus DC.
• Social Security Administration — FICA wage base limits and rates for Social Security and Medicare tax calculations.

Calculator Methodology

Income Tax Calculator

Calculates federal income tax using marginal tax brackets (not a flat rate), applies the standard deduction (or itemized if specified), adds FICA taxes (Social Security at 6.2% up to the wage base and Medicare at 1.45% plus the 0.9% Additional Medicare Tax above $200,000), and calculates state income tax for the selected state. Shows marginal rate, effective rate, and take-home pay.

Capital Gains Calculator

Distinguishes between short-term gains (taxed as ordinary income) and long-term gains (taxed at 0%, 15%, or 20% depending on taxable income). Includes the 3.8% Net Investment Income Tax (NIIT) for high earners. Accounts for capital loss offsets and the $3,000 annual loss deduction limit.

Self-Employment Tax Calculator

Calculates self-employment tax (15.3% on 92.35% of net earnings), the deductible half of SE tax, estimated quarterly payment amounts, and total tax burden including federal income tax. Accounts for the QBI (Qualified Business Income) deduction where applicable.

Tax Scenarios

Our scenario feature lets you model specific financial decisions: "What if I move from California to Texas?", "What if I go freelance?", "What if I exercise stock options?" Scenarios compare tax outcomes side-by-side to show the marginal impact of each decision.

Update Frequency

Tax brackets and rates are updated annually when the IRS publishes inflation-adjusted values, typically in October or November for the following tax year. State tax changes are updated as state legislatures enact new laws.

Known Limitations

• This is not tax advice. Our calculators produce estimates based on simplified inputs. Actual tax liability depends on your complete financial situation, available deductions and credits, filing status nuances, and many other factors.
• We implement the most common scenarios but do not cover every edge case — AMT (Alternative Minimum Tax), foreign tax credits, education credits, child tax credit phase-outs, and other complex provisions may not be fully modeled.
• State tax calculations use standard deductions and basic bracket structures. State-specific credits, local taxes (city/county), and reciprocity agreements between states are not included.
• Self-employment calculations assume a single business with straightforward net income. S-Corp election, multi-member LLCs, and complex business structures require professional tax advice.

How to Cite This Data

If you reference TaxScenario calculations, please cite:

TaxScenario. "2025 Tax Calculator." taxcompare.org, 2026. Accessed [date].

Tax rates and brackets are sourced from IRS publications and state revenue agencies. All tax data is in the public domain. Consult a qualified tax professional for advice specific to your situation.