How this number is made
The effective rate is the tax divided by gross income. It is lower than the bracket of your last dollar because earlier dollars were taxed less and the standard deduction was taxed at zero. This uses the 2026 standard deduction and ordinary brackets. It is not a full return.
- Gross income here is wages with no adjustments.
- Itemized deductions, credits, and preferential rates on gains are not applied.
Formula
Taxable = gross − standard deduction. Tax from the 2026 brackets. Effective rate = tax ÷ gross. Marginal rate is the bracket of the last taxable dollar.
Worked example
With the figures already in the form, effective federal rate is 12.7%.
Questions
Why is the effective rate below my bracket?
Because only the top slice is taxed at the marginal rate. The standard deduction and the lower brackets pull the average down.
Where are credits?
Not here. A child tax credit would lower the tax after this calculation.