Take-Home Pay Calculator

How to Use This Calculator

1. Pick your filing status — Single, Married Filing Jointly, or Head of Household.
2. Enter your gross wages — your full W-2 total, including any tips and overtime premium (those go in their own fields too, but as a subset of the total, not on top of it).
3. Flag anyone 65+ — this unlocks both the existing age-65 standard deduction add-on and the new $6,000 senior bonus deduction.
4. Compare to itemizing — only worth toggling on if your state/local taxes plus mortgage interest and charitable giving would beat the standard deduction.

What Actually Changed for 2026

The One Big Beautiful Bill (OBBBA) added four new federal deductions and limits, all in effect for tax years 2025 through 2028 (2029 for the SALT cap):

• No Tax on Tips — deduct up to $25,000 of qualified tips, phasing out above $150,000 MAGI ($300,000 joint).
• No Tax on Overtime — deduct up to $12,500 ($25,000 joint) of the overtime premium only, same MAGI phase-out as tips.
• Senior Bonus Deduction — an extra $6,000 per person 65+ ($12,000 if both spouses qualify on a joint return), phasing out above $75,000 MAGI ($150,000 joint).
• Higher SALT Cap — the cap on deducting state and local taxes rose to $40,400 for 2026 (from $10,000), only relevant if you itemize, and phasing back down for MAGI above $505,000.

None of these are exemptions — they're deductions that reduce your taxable income, and all four phase out at higher incomes. Tips and overtime still owe Social Security and Medicare tax regardless of the deduction. This calculator applies the real formulas so you can see the actual dollar effect instead of the simplified headline.

Frequently Asked Questions

Does "no tax on tips" mean tips are completely tax-free?

No — it's a deduction, not an exemption. You can deduct up to $25,000 of qualified tips from your federal taxable income (phasing out above $150,000 MAGI single/head of household, $300,000 married filing jointly), but tips are still subject to Social Security and Medicare (FICA) taxes, and any tip income above the cap is still taxed normally. This calculator shows the real dollar impact of the deduction, not a full tax-free headline.

What counts as "qualified overtime" for the deduction?

Only the extra premium portion — the "half" in "time-and-a-half" required by the Fair Labor Standards Act. If you worked overtime hours at 1.5x your regular rate, only the 0.5x premium on top of your regular rate qualifies for the deduction, not your full overtime paycheck. The cap is $12,500 for single/head of household filers or $25,000 for married joint filers, with the same $150,000/$300,000 MAGI phase-out as the tips deduction.

Who qualifies for the new $6,000 senior deduction?

Taxpayers who are 65 or older by the end of the tax year get an extra $6,000 deduction ($12,000 on a joint return if both spouses qualify), on top of the existing additional standard deduction for being 65+. It phases out at 6% of MAGI above $75,000 (single/head of household) or $150,000 (married joint), fully gone $100,000 above that threshold. It's available whether or not you itemize, and only through 2028.

How does the higher SALT cap affect me?

The cap on deducting state and local taxes rose from $10,000 to $40,400 for 2026, but it only matters if you itemize deductions instead of taking the standard deduction — and it phases back down toward the old $10,000 floor once your MAGI passes $505,000. For most filers who take the standard deduction, this change has no effect at all.

Why doesn't this calculator ask about state income tax?

State income tax rules vary enormously by state (some states have none), so this calculator focuses on federal income tax and FICA (Social Security and Medicare) only, which apply the same way nationwide. Your actual take-home pay will be lower than shown here if your state taxes income — check your state's rules separately.

Is this exactly what my paycheck will show?

No — this estimates your full-year federal tax liability and FICA based on the figures you enter, assuming no income besides wages and no adjustments like retirement contributions. Actual paycheck withholding depends on your W-4 elections and your employer's payroll system, and your final tax bill depends on your complete tax return. Use this to understand the OBBBA changes, not as a substitute for a tax professional or the IRS withholding estimator.

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