Tax liability is calculated using 2026 IRS brackets and standard deduction applied to your taxable income (wages plus other income, minus deductions). Dependent credits reduce your liability after brackets are applied.
Estimated withholding follows the IRS Publication 15-T wage-bracket method: wages minus standard deduction (adjusted for Step 4b itemized deductions), run through the tax brackets, minus dependent credits, plus any Step 4c additional withholding.
The gap between liability and withholding drives the recommendation. A gap within ±$500 is considered well calibrated. Outside that range, the tool calculates the per-period Step 4c adjustment needed to close it.
State tax is estimated from 2026 Tax Foundation bracket data. State withholding is approximated from the same brackets. Actual withholding varies by state form and employer. For dual-income households or multiple jobs, use the IRS Withholding Estimator →
All figures use 2026 IRS tax brackets and standard deductions. Planning estimate only.