Federal tax basics

Your bracket is not your tax rate

Only the dollars inside each bracket pay that bracket's rate. Single filer, $70,000 of wages, no other income, 2026 tables:

That is why more overtime never lowers what you keep after federal income tax. A raise taxes only the added dollars at the higher rate.

Head of household and married filing separately use different tables. The calculator estimates single and married filing jointly.

Social Security and Medicare

On W-2 pay you pay 6.2% Social Security on the first $184,500 of 2026 wages and 1.45% Medicare on all of it, plus 0.9% Additional Medicare above $200,000 ($250,000 married filing jointly). These come out at flat rates, so they do not create the swings that income-tax withholding does.

Withholding and what you actually owe

Payroll figures federal income tax on each check as if that pay lasted all year. Your return is based on what you really earned. When those differ, you settle up.

That is an illustration of the mechanism. Add other income for the year, or change your W-4, and the number moves or disappears. A stipend, a second job or a spouse's pay can turn it into a balance due.

Check yours with the IRS Tax Withholding Estimator, then give payroll a new Form W-4 if it needs changing.

More than one employer

Each employer withholds as if it were your only job, so a PRN job on top of a staff job often leaves you short. Step 2 of the W-4 is built for this, or you can add extra withholding on Step 4(c).

Each employer also withholds Social Security up to the wage base on its own. If two together take you over, you get the excess back as a credit on your return. Wages of $120,000 and $100,000 in 2026 would overpay about $2,201. Nothing is lost, but you have to claim it.

Estimated payments

You generally must pay estimated tax if you expect to owe at least $1,000 after withholding and credits, and your withholding and credits will come to less than the smaller of 90% of this year's tax or 100% of last year's. That second figure is 110% if last year's adjusted gross income was over $150,000.

For 2026 the due dates are April 15, June 15, September 15 and January 15, 2027, using Form 1040-ES. W-2 workers can usually cover a gap with extra withholding instead. Most states with an income tax have their own version.

The overtime deduction

There is a new deduction for qualified overtime, claimed on Schedule 1-A whether or not you itemize. The maximum is $12,500 a year, or $25,000 on a joint return. It phases out above $150,000 of modified adjusted gross income ($300,000 joint). You need a valid Social Security number, and married filers must file jointly.

Only the premium counts, meaning the extra half in time-and-a-half that the Fair Labor Standards Act requires. Pay beyond what the Act requires, such as contract double time, does not count. From 2026 employers report the amount on your W-2 in box 12, code TT, and for years after 2025 you cannot claim more than that box shows. If box 12 looks wrong, take it up with payroll before you file.

The calculator leaves this out, so its federal number can run a little high if you work overtime.