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 will cover 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 retirees not yet on Medicare. 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.
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
- Wages, pension, IRA withdrawals, Roth conversions
- Qualified Business Income deduction from REIT dividends
- 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. 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 tax
- Alternative Minimum Tax (AMT)
- Foreign Tax Credit
These are more complicated, and many retirees don’t have them. Collecting inputs to calculate them would make the calculator more cluttered. If you know you’ll have self-employment tax or Foreign Tax Credit, please add or subtract them from the results.
In addition, the calculator only calculates the federal income tax. It doesn’t calculate state and local taxes.
Calculator
The calculator does both 2025 and 2026. 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. I’ll update it to include 2027 as soon as I have a good handle on the 2027 tax brackets.
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. Qualified dividends go into the “Qualified dividends and long-term capital gains” field. The difference between ordinary dividends and qualified dividends is non-qualified dividends. They go to the next field, “Other investment income.”
Capital Loss
Capital loss should be used to offset capital gains first. If there’s still capital loss left after offsetting all capital gains, up to $3,000 of it goes into the “Other investment income” field as a negative amount.
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 when it’s a net loss after expenses and depreciation.
Bug Reports and Feature Requests
Please leave a comment if the calculator is giving you unexpected results or if you have a suggestion for improvement. Please use the contact form if you aren’t comfortable posting numbers in public comments.
I apologize in advance for not wanting to make the inputs more granular. Making a streamlined calculator for retirees is a guiding objective. More comprehensive calculators already exist. I don’t want to reinvent them. I want this calculator to be easy to use for 99% of retirees.
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