This is one of our most consequential calcualtors showing you how to plan for the future using new tax incentives from 2025 tax changes. Our 2026 tax scenario calculator for millennials is designed to show you how to use the new tax law to save money, reduce your withholding and break even at the end of the year owing zero federal income taxes.

Tax Strategy • 2026
2026 Tax Scenario Calculator — V3 (Compare A vs B)
Federal-only (Mississippi later). Save Scenario A, change inputs, save Scenario B, then compare. Includes 2026 brackets, QD/LTCG 0%/15%/20% stacking, self-employment tax, simplified refundable Child Tax Credit, and a simplified qualified-vehicle-loan-interest deduction (if eligible).
Inputs
Filing status
Qualifying children (under 17)
W-2 wages (box 1 estimate)
Federal withholding (W-2 + other)
Estimated payments (quarterly, etc.)
Pay frequency (for withholding math)
Side hustle / 1099 income (gross)
Side hustle expenses (deductible)
Interest income
Ordinary dividends (non-qualified)
Qualified dividends
Long-term capital gains
Short-term capital gains
Other income
401(k) / 403(b) pretax contributions
HSA contributions (deductible)
Traditional IRA contribution (deductible)
Student loan interest paid
Qualified vehicle loan interest paid (annual)
Vehicle VIN (optional, not stored)
Vehicle qualifies for the deduction New + personal use + final assembly in the U.S. + loan originated after 12/31/2024.
Deductions
Itemized deductions (total)
Workflow: set your “baseline” inputs → Save as Scenario A. Then adjust one thing → Save as Scenario B. The right side shows the difference and a simple per-paycheck withholding adjustment to break even.
Scenario Compare

Scenario A: not saved yet

Click “Save as Scenario A” to capture your baseline.

Scenario B: not saved yet

Change inputs and click “Save as Scenario B”.

Refund / Owed (B − A)—
Total tax change (B − A)—
Per-paycheck withholding change—
Scenario A breakdown
AGI—
Taxable income—
Ordinary tax—
QD/LTCG tax—
SE tax—
CTC refundable—
Vehicle-loan-interest deduction applied—
Total tax—
Scenario B breakdown
AGI—
Taxable income—
Ordinary tax—
QD/LTCG tax—
SE tax—
CTC refundable—
Vehicle-loan-interest deduction applied—
Total tax—
This is an educational estimate. Withholding helper is simple math (difference ÷ pay periods), not advice.
Educational estimate only (not tax, legal, or financial advice). This tool does not store inputs. V3 includes: 2026 federal brackets, qualified dividends + long-term gains preferential rates, self-employment tax, simplified refundable Child Tax Credit, and a simplified qualified-vehicle-loan-interest deduction (if eligible). Coming next: CTC phaseout, IRA deductibility rules, NIIT, itemized detail, and Mississippi add-on.

What Each Input Means (Quick Help)

Filing status
Determines your tax brackets, standard deduction, and credit thresholds.

W-2 wages (Box 1 estimate)
This is the number from Box 1 on your W-2, not your gross salary.
It already reflects pre-tax deductions like 401(k), HSA payroll contributions, and some benefits.

Federal withholding
The total federal income tax already taken out of your paychecks (plus any other withholding you expect).

Pay frequency
Used only for the per-paycheck withholding math (26 = bi-weekly, 24 = semi-monthly, 12 = monthly).

Investment Income

Interest income
Bank interest, money market interest, CDs — usually taxed as ordinary income.

Ordinary (non-qualified) dividends
Dividends that do not receive special tax rates.
Often from REITs, bond funds, or short holding periods.

Qualified dividends (QD)
Dividends that may be taxed at lower capital-gains rates (0% / 15% / 20%) if you meet holding-period rules.
Typically from U.S. stocks and many stock ETFs.

Long-term capital gains (LTCG)
Gains from assets held more than one year.
Often taxed at lower preferential rates.

Short-term capital gains (STCG)
Gains from assets held one year or less.
Taxed like ordinary income.

Side Income

Side hustle / 1099 income (gross)
Income from freelancing, contract work, or gig platforms before expenses.

Side hustle expenses (deductible)
Ordinary and necessary business expenses that reduce taxable side income.

Self-employment tax
This tool estimates Social Security and Medicare taxes on net side income (simplified).

Above-the-Line Deductions

401(k) / 403(b) pretax contributions
Reduce taxable income now and are already reflected in W-2 Box 1 if payroll-deducted — enter only if you’re estimating totals or adding changes.

HSA contributions (deductible)
Reduce income if eligible for an HSA-qualified health plan.

Traditional IRA contribution (deductible)
May reduce income depending on coverage and income limits (simplified here).

Student loan interest paid
Up to $2,500 may reduce income if you qualify (phaseouts apply).

Vehicle Loan Interest (New for 2026)

Qualified vehicle loan interest paid
Interest paid on a new, personal-use vehicle loan if the vehicle qualifies.

Vehicle qualifies toggle
Turn this on only if all apply:

  • New vehicle
  • Personal (not business) use
  • Final assembly in the U.S.
  • Loan originated after 12/31/2024

The calculator applies a simplified phaseout based on income. Real eligibility depends on final IRS rules and your facts.

How to Use This Best

This tool works best when you:

  • Save Scenario A as “today”
  • Change one variable (401(k), withholding, side income, etc.)
  • Save Scenario B and compare

That’s the core idea behind scenario-based planning.

Want deeper guidance?

This calculator is part of the Millennial Financial Lab where you’ll find:

  • Plain-English tax and income guides
  • Scenario planning tools
  • Retirement and take-home-pay calculators
  • Decision tools built specifically for Millennials

👉 Explore more tools and guides here:
https://retirecoast.com/millennial-financial-lab. Our Subscription section will help you make decisions that can save you big dollars. Explore it by clicking on the link above.

For reference go to the IRS.Gov page for up to date lnformation and filing forms.