[Updated on September 11, 2026 for the 2027 tax year.]
A reader suggested that I release my tax calculator for retirees under a separate title because it has outgrown its original purpose.
I initially made a calculator only for the taxable portion of Social Security benefits. Many questions from readers made me realize that they were also looking for the resulting taxes from their Social Security benefits and other income. I added the tax calculation and expanded the scope over time. It’s now a full-fledged tax calculator for retirees.
Why Another Tax Calculator
There are many tax calculators online already. However, most of them only look backward, not forward. The 2027 tax brackets will be known by September 2026, but most online tax calculators don’t update to 2027 until well into 2027. Because I track tax brackets even before the IRS officially publishes them, my tax calculator covers the next year sooner than any other, giving you an early start on planning.
TurboTax desktop software has a What-If Worksheet for planning (I wrote about it in Tax Planning with TurboTax What-If Worksheet). It works to some degree, but it’s missing some important pieces. Notably, it doesn’t include the ACA premium tax credit for early retirees. Nor does it include the effect on IRMAA for retirees on Medicare. The popular Dinkytown 1040 Tax Calculator and its licensed clones on AARP and other websites don’t calculate the ACA premium tax credit or the effect on IRMAA either.
Other tax software programs, such as FreeTaxUSA, don’t even do 2026 until November, when they release the 2026 version. The early releases are often still incomplete at that time. In general, tax software is intended for filing, not for planning.
AI is quite good these days, but as you see in Which AI Calculates Taxes Correctly?, a tax calculator is faster and more accurate than AI if you know which one to use.
Some niche tax calculators update early and are more complete. Case Study Spreadsheet and Excel1040 are two good ones I know. I wrote about Case Study Spreadsheet in Roth Conversion with Social Security and Medicare IRMAA. Both Case Study Spreadsheet and Excel1040 require more upfront setup, though. The calculator I made is less comprehensive but is easier to get the result quickly and accurately.
Why Retirees
I specifically made this tax calculator only for retirees.
Retirees’ taxes are simpler. They don’t have deductions and credits related to children and education, such as the Child Tax Credit, Child and Dependent Care Credit, American Opportunity Credit, or the Student Loan Interest Deduction. A general-purpose tax calculator meant for everyone forces retirees to wade through many irrelevant inputs. I believe in Less Is More. A more streamlined calculator is better than a cluttered one.
Meanwhile, retirees have a greater need for a tax calculator to set up withholding and estimated tax payments. They also have more control over the sources of their income. Taxable income can come from IRA withdrawals, capital gains, or Roth conversions. A tax calculator is helpful to compare different approaches.
Tax Planning A/B Comparisons
Besides getting a bottom-line number to set tax withholding and estimated tax payments, a good way to use this tax calculator is to compare different scenarios. Enter your income composition one way and save the results as a baseline Scenario A. Alter some inputs and save the results again as Scenario B. Open the saved Scenario A and Scenario B side-by-side and compare. You can save an unlimited number of scenarios:
- What if I withdraw more from the IRA instead of realizing capital gains?
- What if I increase Roth conversions?
- What if I sell from taxable investments?
- What if I receive less interest?
- What if I work a little?
- What if I die and my surviving spouse files as a single next year?
Whatever comes to mind, you can see how it affects your federal income tax.
What’s Included
This calculator covers pretty much everything relevant to retirees:
- Muni bond interest
- Qualified dividends and long-term capital gains
- Rentals, interest, non-qualified dividends, short-term capital gains, capital loss
- Incidental self-employment
- Wages, pension, IRA distributions, Roth conversions
- Qualified Business Income deduction
- Net Investment Income Tax
- Above-the-line deductions
- Standard Deduction
- Cash donations made directly to charities
- Senior Deduction
- Auto loan interest deduction
- Itemized deductions
- Non-cash donations and donations to Donor-Advised Funds
- State and local taxes (SALT) paid
- Medical expenses
- Mortgage interest
- Medicare IRMAA
I picked these for their relevance to retirees. Everything included is updated to the 2025 Trump tax law (One Big Beautiful Bill Act). The less-used itemized deductions and ACA tax credit are collapsed by default. You can easily skip those if you don’t have them, but you can still dive in when you do.
What’s Not Included
Besides things not relevant to retirees, this calculator doesn’t calculate these items:
- Self-employment income plus wages exceeding the Social Security wage base
- Self-employment retirement contributions and health insurance deduction
- Alternative Minimum Tax (AMT)
- Foreign Tax Credit
This calculator covers incidental self-employment income, but it doesn’t cover more complicated scenarios, such as when you have both self-employment income and W-2 wages, the sum of the two exceeds the Social Security wage base ($184,500 in 2026), and limits your self-employment tax. Nor does it cover making retirement contributions based on self-employment income to SEP-IRAs, SIMPLE IRAs, or solo 401(k) plans, or taking a self-employment health insurance deduction.
AMT and Foreign Tax Credit are also more complicated, and many retirees don’t have them. Collecting inputs to calculate them would make the calculator more cluttered.
I’m considering creating a separate, longer version of this tax calculator to include these more complicated items.
In addition, the calculator only calculates the federal income tax. It doesn’t calculate state and local taxes.
Calculator
The calculator does 2025, 2026, and 2027. You can double-check the 2025 results against your filed 2025 tax return. When you see that the calculator is correct for 2025, you’ll have confidence that it’s also correct for 2026 and 2027. The 2027 calculations use my projected numbers in 2027 Tax Brackets, Standard Deduction, Capital Gains, QCD.
This calculator works better on a desktop computer or a newer tablet. All calculations are performed locally in your browser. Nothing is transmitted to any server.
Notes
Here are some notes for how the calculator expects to see various numbers.
Social Security
Enter the total gross Social Security benefits for the calendar year (not monthly) before any Medicare premium deductions. If you’re married filing jointly, include the total gross Social Security benefits for the calendar year from both spouses. If you start or stop benefits in the middle of a year, enter the total benefits expected for that year.
Dividends
Dividends can be qualified or non-qualified. As reported on Form 1040, ordinary dividends are the total of both qualified and non-qualified dividends. The calculator needs to break out qualified and non-qualified dividends separately.
Suppose you have $1,000 in total dividends (“ordinary dividends” on Form 1040 and Forms 1099-DIV), of which $800 is qualified dividends and $50 is 199A dividends. The $800 in qualified dividends goes into the “Qualified dividends and long-term capital gains” field. The difference between ordinary dividends and qualified dividends is non-qualified dividends, which is $200. Include only $200 in the next field, “Other investment income.” 199A dividends from REITs are included as a part of non-qualified dividends. $50 goes into the “199A dividends” field.
Capital Loss
Capital loss should be used to offset capital gains first. If there’s still capital loss left after offsetting all capital gains, use up to $3,000 to offset items in the “Other investment income” field.
Rentals
Rental income goes into the “Other investment income” field. It should be the net rental income after all expenses and depreciation. This calculator doesn’t cover the case of a net loss after expenses and depreciation.
Tax Withholding
If you have tax withheld from wages, IRA distributions, Roth conversions, or any other source, use the gross income before tax withholding. Tax withholding is a prepayment against your total tax for the year. It affects the residual amount you’ll pay at tax filing time, but it doesn’t affect your total tax number itself.
QCDs
Qualified Charitable Distributions (QCDs) go directly from your IRA to charities. They don’t count as your income. Nor do you receive a tax deduction for QCDs. Exclude any QCDs in the calculator. Only include IRA distributions that aren’t QCDs.
ACA Second Lowest Cost Silver Plan
If you’re on ACA health insurance, the government uses the full price of the Second Lowest Cost Silver Plan (SLCSP) to calculate the Premium Tax Credit you’re eligible for.
One way to get that number is to go back to your state’s marketplace (or healthcare.gov if your state doesn’t have a separate one). They usually have a “browse plans” option that doesn’t require logging in. Enter your zip code, household size, your age(s) as of 12/31 last year, and a very high income, like $300,000. That will give you full-price plans. Filter for Silver plans only and sort by premium from lowest to highest. Take the second lowest number. The calculator needs that number to calculate the subsidy.
Another way is to use the KFF subsidy calculator. Again, enter your state and zip code, household size, your age(s) as of 12/31 last year, and a very high income, like $300,000. The KFF calculator shows you a price for a Silver plan. That’s the full price of the second-lowest cost Silver plan.
Bug Reports and Feature Requests
Please include the full output in the comments if the calculator gives you unexpected results. Please use the contact form if you aren’t comfortable posting numbers in public comments.
Please leave a comment if you have a suggestion for improvement. I apologize in advance for not wanting to make the inputs more granular in this version of the calculator. Making a streamlined calculator for retirees is a guiding objective. I want this calculator to be easy to use for 99% of retirees. I’m thinking of creating a separate, longer version of this calculator to cover things that apply to only a small percentage of retirees. The additional inputs and granularities can go into the longer version.
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Eric says
Harry, I hope you don’t mind that your calculator exploded with reader interest.
A question: I contribute cash to a DAF. Is that properly handled in the itemized deductions section ? The rules can be tricky, since the following apply:
1. A 0.5% of AGI floor
2. Maximum 60% of AGI may be an itemized deduction
3. Donations in excess of 60% of AGI may be carried forward
4. The omitted floor can carry forward if the donation exceeds the 60% AGI limit (see the Kitces article)
Cheers! Eric
Harry Sit says
Eric – The calculator assumes that donations to a DAF are appreciated securities, since that’s how most people use a DAF. Those are capped at 30% of AGI. Cash donations should be entered on the line “Cash donations made directly to charities (outside of QCD)” when you’re itemizing, although in your case you’re donating to a DAF. Cash donations are capped at 60% of AGI when you itemize. The sum of both cash and non-cash donations is then reduced by 0.5% of AGI.
It’s a compromise to minimize the number of inputs and handle most use cases. It doesn’t matter where you enter your donations when you itemize and donate less than 30% of AGI.
The calculator doesn’t ask or tell you about carried-forward donations. If you have a carryover from the previous year, add it to the donation amount for the current year.
Eric says
Harry, thanks for the quick and thorough reply
“Cash donations should be entered on the line “Cash donations made directly to charities (outside of QCD)” when you’re itemizing, although in your case you’re donating to a DAF. ”
That makes fine sense. I should have realized.
FYI: the IRS has an ‘order of operations’ it applies to donations of different types. One cannot simply bunch them all together