Question 1

How is income tax calculated?

Accepted Answer

Taxable income is your gross income minus deductions; tax is applied by brackets and marginal rates, then credits reduce the final bill.

Question 2

What is the difference between marginal and effective tax rate?

Accepted Answer

Marginal rate applies to your last dollar; effective rate is total tax divided by total income.

Question 3

Are bonuses taxed differently?

Accepted Answer

They are often withheld at a flat rate for payroll, but your final liability is based on your annual tax bracket.

Question 4

How do deductions vs credits differ?

Accepted Answer

Deductions reduce taxable income; credits reduce tax liability dollar-for-dollar.

Question 5

Can the calculator handle state/province taxes?

Accepted Answer

Enter local rates if supported or use the federal-only mode; rules vary by location.

Tax Calculator — Income Tax & Withholding Calculator