To see how these opportunities play out, see how we pay zero taxes on $100k/year income. This tax calculator will estimate tax burden, yes, but by sharing marginal rate info and opportunities for tax-free Roth conversions and capital gain harvests it also is helpful for minimizing tax burden today and in the future. Instead of using unhelpful tools, I built my own. By trying to cover the weird cases that apply to only a few people, most tax calculators are needlessly complex and time consuming. The US tax code is rather simplistic and straight forward for the vast majority of tax-payers. To think long term, we need to understand our marginal tax rate and options for tax-free income and growth. Long-term thinking is at the heart of any good tax minimization strategy, including our own efforts to Never Pay Taxes Again. Total Tax with FEIE: Total tax minus tax on excluded income. Tax on Foreign Earned Income: Calculated tax burden on the excluded income. Total tax: The sum of tax for both Ordinary and Qualified income. Tax on Qualified Income: Calculated tax burden on qualified income. Tax on Ordinary Income: Calculated tax burden on ordinary income.

Taxable Income: AGI minus deductions (Standard or Itemized). Itemized Deductions: The sum of all itemized deductions (if applicable)įoreign Earned Income: The sum of all foreign earned income eligible for the Foreign Earned Income Exclusion (FEIE.) Outputs:Īdjusted Gross Income (AGI): Total income minus adjustments. Qualified Income: Qualified dividends and long-term capital gains.Īdjustments: Top of the line deductions - IRA contributions, student loan interest, 1/2 of self-employment taxes, etc. Ordinary Income: Job & self-employment income, interest, non-qualified dividends, short-term capital gains, taxable retirement income, etc. This decides which standard deduction and tax brackets apply (see details here.) Filing Status: Your tax filing status - Married filing jointly or separately, Single, Head of Household.

Tax caster 2021