Tax calculator

Payroll tax (FICA)

Social Security and Medicare taxes withheld from wages and self-employment income.

Payroll taxes take 7.65% of most wages from employees, with employers paying a matching share. They apply to earned income only, so they stop when you stop working, which matters for early-retirement tax estimates.

Employee FICA = 6.2% × wages up to the wage base + 1.45% × all wages + 0.9% × wages above $200k single / $250k MFJ

Example: On $60,000 of wages, an employee pays 7.65% × $60,000 = $4,590 of FICA (Social Security plus Medicare), and the employer pays a matching $4,590.

Capital gains

The profit from selling an asset for more than its cost basis; taxed at lower rates if held more than one year.

Gains on investments held over a year are long-term and taxed at 0%, 15% or 20% depending on your income; shorter holdings are taxed like wages. Because long-term gains stack on top of ordinary income, how much else you earn decides which rate applies.

Gain = Proceeds − Basis ; Long-term rate = 0%, 15% or 20% by taxable income

Example: A single filer in 2026 with $43,900 of taxable wages and a $20,000 long-term gain pays 0% on the first $5,550 of the gain and 15% on the other $14,450, or $2,167.50. If the gain were short-term, it would cost $3,750.

Taxation of Social Security benefits

Up to 85% of Social Security benefits can be federally taxable, depending on your other income.

Whether your benefits are taxed depends on "provisional income," which is your other income plus half your benefits. Because the thresholds are not indexed, many retirees pay tax on part of their benefits, and extra withdrawals can raise your effective marginal rate.

Provisional income = AGI excluding benefits + tax-exempt interest + 50% of benefits

Example: A single retiree with $30,000 of other income and $24,000 of benefits has provisional income of $30,000 + $12,000 = $42,000, which makes $11,300 of the benefits taxable.

Traditional vs. Roth

Traditional accounts give a tax break now and tax withdrawals later; Roth accounts are funded with taxed money and grow tax-free.

The choice mostly comes down to whether your tax rate is higher now or in retirement. Traditional contributions win if your rate falls later; Roth wins if it rises; at equal rates they come out the same.

Traditional after-tax value = C × (1 + r)^t × (1 − t_later) ; Roth = C × (1 − t_now) × (1 + r)^t

Example: $10,000 of pre-tax salary growing at 7% for 30 years becomes $76,123. In a traditional account taxed at 15% later you keep $64,704, versus $57,853 in a Roth after paying 24% up front.

Health savings account (HSA)

A tax-advantaged account for medical expenses, available with an HSA-eligible health plan, that can also act as a retirement account.

HSAs offer a rare triple tax break - deductible contributions, tax-free growth and tax-free withdrawals for medical costs. After 65, non-medical withdrawals are taxed like a traditional IRA, with no penalty.

Example: A family in the 22% bracket that puts the 2026 maximum of $8,750 into an HSA through payroll saves $1,925 of federal income tax plus about $669 of FICA, roughly $2,594 in all.

Standard deduction

A fixed amount subtracted from income before tax, available to anyone who does not itemize deductions.

The standard deduction shields the first slice of your income from federal income tax. In retirement it also creates room for tax-free withdrawals or Roth conversions, which the app uses when it plans drawdowns.

Example: A single filer in 2026 with $70,000 of wages subtracts the $16,100 standard deduction and pays federal income tax on only $53,900.