How Much Will I Get Back in Taxes If I Make $100k?

Answering the question of how much you will get back in taxes on a $100,000 income is not straightforward. The final refund or tax owed depends on a variety of factors specific to your unique financial and personal situation. This article serves as a guide to help you understand the key components that influence your tax outcome, walking you through the process from your gross earnings to your final tax liability or refund.

Determining Your Taxable Income

The journey from a $100,000 gross income to your actual tax bill begins with calculating your taxable income, which is the portion of your income that is subject to tax. The first step in this process is determining your filing status, as this dictates your standard deduction and the tax brackets you will use. The primary filing statuses are:

• Single
• Married Filing Jointly
• Married Filing Separately
• Head of Household
• Qualifying Widow(er)

Once your filing status is established, you can reduce your gross income through deductions. You have the choice between taking a standard deduction or itemizing your deductions. For the 2024 tax year, the standard deduction for a single individual is $14,600, and for married couples filing jointly, it is $29,200. These amounts are indexed for inflation and are set to increase for the 2025 tax year to $15,000 and $30,000, respectively. Most taxpayers opt for the standard deduction due to its simplicity.

Itemizing deductions involves tallying up specific deductible expenses on Schedule A of your Form 1040. This path is generally beneficial if your total itemized deductions exceed your available standard deduction. Common itemized deductions include mortgage interest on up to $750,000 of home acquisition debt, state and local taxes (SALT) which are capped at $10,000 per household, and medical expenses that exceed 7.5% of your adjusted gross income (AGI). Charitable contributions to qualified organizations can also be itemized.

Beyond the standard or itemized deductions, certain “above-the-line” deductions can further reduce your income. These are advantageous because they are available even if you don’t itemize. Significant examples include contributions to a traditional Individual Retirement Arrangement (IRA) and interest paid on student loans. For 2024, you can deduct up to $2,500 in student loan interest, though this benefit phases out for single filers with a modified adjusted gross income (MAGI) between $80,000 and $95,000. Similarly, the deductibility of traditional IRA contributions depends on your income and whether you are covered by a retirement plan at work.

To illustrate, consider a single individual with a $100,000 gross income who is not itemizing. They would subtract the 2024 standard deduction of $14,600. Assuming they only take the standard deduction, their taxable income would be $100,000 minus $14,600, resulting in a taxable income of $85,400.

Calculating Your Federal Tax Liability

The United States employs a progressive tax system, which means that as your income increases, it is taxed at progressively higher rates. Not all of your income is taxed at a single rate; instead, your income is divided into segments, or “brackets,” with each segment being taxed at a different rate. For the 2024 tax year, the federal income tax brackets are 10%, 12%, 22%, 24%, 32%, 35%, and 37%.

The specific income thresholds for these brackets depend on your filing status. This structure ensures that you are not penalized for earning a dollar more and moving into a higher tax bracket, as only the income within that new bracket is taxed at the higher rate.

Let’s continue the example of a single filer with a taxable income of $85,400. Using the 2024 tax brackets, the calculation would be as follows: The first $11,600 is taxed at 10%, resulting in $1,160 of tax. The income between $11,601 and $47,150 is taxed at 12%, which amounts to a tax of $4,266 on that portion. The remaining income, from $47,151 up to $85,400, falls into the 22% bracket, leading to a tax of $8,415 on this segment.

Summing these amounts gives a total preliminary tax liability. In our example, the total tax would be $1,160 + $4,266 + $8,415, which equals $13,841. This figure represents the initial amount of tax owed before any tax credits are applied.

Applying Tax Credits to Lower Your Bill

Tax credits are a tool for reducing your tax liability because they offer a dollar-for-dollar reduction of the taxes you owe. Unlike deductions, which lower your taxable income, credits directly decrease your tax bill.

Credits are categorized as either non-refundable or refundable. A non-refundable credit can reduce your tax liability to zero, but you will not receive any of it back as a refund if the credit is larger than the tax you owe. In contrast, a refundable credit can result in a tax refund even if your tax liability is already zero.

Several common credits may be available to an individual earning $100,000, though many are subject to income limitations. The Child Tax Credit, for instance, is worth up to $2,000 per qualifying child for the 2024 tax year and is available to single filers with a modified adjusted gross income up to $200,000. For those with dependents who do not qualify for the Child Tax Credit, the Credit for Other Dependents may be an option. Education-related expenses can also lead to credits, such as the American Opportunity Tax Credit and the Lifetime Learning Credit, both of which have income phase-outs that may affect eligibility for someone earning $100,000.

Continuing with our running example, let’s assume the single filer with a preliminary tax liability of $13,841 has one qualifying child, making them eligible for the full $2,000 Child Tax Credit. This credit would be subtracted directly from their tax liability, reducing it from $13,841 to $11,841. If the filer had no tax liability, they could still receive up to $1,700 of the Child Tax Credit as a refund for the 2024 tax year.

Withholding and Your Final Tax Refund

The final step in determining whether you receive a refund or owe additional tax is to compare your total tax liability with the amount of tax you have already paid throughout the year. For most employees, these payments are made through tax withholding from their paychecks. The amount withheld is reported in Box 2 of your Form W-2, which you receive from your employer at the beginning of each year.

For individuals who are self-employed or have other sources of income not subject to withholding, such as investments or rental income, estimated tax payments serve the same purpose. These are quarterly payments made directly to the IRS to cover your anticipated tax liability for the year.

If the total payments are greater than your liability, you will receive a tax refund for the difference. If your payments are less than your liability, you will owe the remaining balance to the IRS.

To conclude our example, the filer’s final tax liability after the Child Tax Credit was $11,841. If their Form W-2 shows that $14,000 was withheld from their paychecks during the year, they would receive a refund of $2,159 ($14,000 – $11,841). However, if only $10,000 had been withheld, they would owe an additional $1,841 in taxes.