How your refund is worked out
A refund is not a bonus. It is the amount your employer over-withheld across the year, returned to you. Three steps get there.
For 2026 the standard deduction is $16,100 single, $32,200 married filing jointly and $24,150 head of household. Social Security and Medicare are separate and are not refundable, so they do not appear here.
Worked example: $75,000, single, $9,000 withheld
Taxable income is $75,000 − $16,100 = $58,900. Running that through the 2026 brackets gives a bill of $7,670, an effective rate of 10.2% on a 22% top bracket. With $9,000 already withheld, the refund is $1,330.
The same income, different filing status
| Filing status | Standard deduction | Taxable income | Tax owed | Refund on $9,000 |
|---|---|---|---|---|
| Single | $16,100 | $58,900 | $7,670 | $1,330 |
| Married filing jointly | $32,200 | $42,800 | $4,640 | $4,360 |
| Head of household | $24,150 | $50,850 | $5,748 | $3,252 |
On $75,000 of income with $9,000 withheld. Filing status changes the deduction and the bracket widths, not the rates.
Federal tax owed by income (single)
| Income | Taxable | Federal tax | Effective rate | Top bracket |
|---|---|---|---|---|
| $40,000 | $23,900 | $2,620 | 6.6% | 12% |
| $60,000 | $43,900 | $5,020 | 8.4% | 12% |
| $75,000 | $58,900 | $7,670 | 10.2% | 22% |
| $100,000 | $83,900 | $13,170 | 13.2% | 22% |
| $150,000 | $133,900 | $24,734 | 16.5% | 24% |
| $200,000 | $183,900 | $36,734 | 18.4% | 24% |
The effective rate is always well below the top bracket, because only the last slice of income is taxed at it.
Frequently asked questions
How is a federal refund worked out?
It is the difference between what your employer withheld and what you actually owe. Your income less the standard deduction gives taxable income; the brackets turn that into a tax bill; subtract what has already been withheld. On $75,000 single with $9,000 withheld, the bill is $7,670, so the refund is $1,330.
Is a big refund a good thing?
Not really — it means you lent the government money for free all year. Withholding $7,670 on this income would land you near zero at filing, leaving the difference in your paycheck instead. Adjust it with a new W-4 if you would rather have the money monthly.
Why does this not include tax credits?
Credits such as the Child Tax Credit, EITC and education credits depend on details this tool does not ask for, and getting them wrong would overstate a refund. Because credits only ever increase a refund, the figure here is a floor rather than a final number.
Does a 401(k) contribution increase my refund?
Yes, if it is a traditional (pre-tax) contribution. Putting $10,000 into a traditional 401(k) on $75,000 cuts the tax bill from $7,670 to $5,620 and raises the refund by $2,050. A Roth contribution does not, because it is made after tax.
Related tools
- Paycheck calculator — what is withheld from each paycheck in the first place
- Take-home pay by state — the state return this one does not cover
- Compound interest — what a refund becomes if you invest it