Tax Bracket Calculator

Your marginal tax rate is the rate you pay on your last dollar of income — the highest bracket your income reaches. Your effective tax rateis your total tax divided by total income — it's always lower than your marginal rate because the first dollars you earn are taxed at lower rates.

The U.S. uses a progressive tax system. Your income isn't all taxed at one rate. Instead, each portion of your income is taxed at the rate for that bracket. For example, if you're single with $85,000 taxable income, the first $11,600 is taxed at 10%, the next $35,550 at 12%, and the remaining at 22%.

The AI buildout has pushed total compensation for engineers, researchers, and operators into brackets most never expected. A senior AI engineer at a frontier lab or big tech can easily see $400k–$800k+ W2 + equity in a single year when RSUs vest or a liquidity event hits.

This creates unique tax problems: large one-time income spikes from vesting schedules, AMT exposure on ISO grants, and the need for year-round tax planning rather than end-of-year scrambling. Many builders are now effectively "accidental" high earners whose tax situation looks more like a small business owner than a traditional salaried professional.

Tech compensation is heavily back-loaded into equity. When AI stocks (or your startup) have violent swings, your tax bill does not care about paper losses. Vested RSUs are taxed as ordinary income at the fair market value on the vest date — even if the stock crashes 40% before you sell.

Smart operators use 10b5-1 plans, sell-to-cover strategies, and tax-loss harvesting in taxable brokerage accounts to smooth the impact. Some diversify aggressively into broad indexes the moment shares vest. The calculator helps you model the real after-tax picture before you make spending or liquidity decisions.

• Maximize retirement contributions — 401k + mega backdoor + HSA is still the single best legal shield for high earners.
• Watch AMT on ISOs — exercising incentive stock options can trigger alternative minimum tax even with no regular tax due.
• Quarterly estimated payments — underpayment penalties hurt when you have large vesting or bonus events. Use the withholding estimator.
• Tax-loss harvesting cadence — pair it with equity sales, not just December.
• State taxes matter — California + New York residents can lose another 10-13% on top of federal brackets.

• Maximize retirement contributions — 401k contributions reduce taxable income directly.
• Use an HSA — triple tax advantage: deductible, grows tax-free, tax-free withdrawals for medical.
• Harvest investment losses — offset capital gains with losses, plus $3,000 against ordinary income.