Tax optimization, mapped as a decision sequence.
Brackets, deductions, tax-advantaged accounts, and investment timing each affect the ones that follow. The product runs them in the order they should be decided.
Only the income inside each band is taxed at that band's rate.
This is the single most common point of confusion in tax planning. Moving into a higher bracket never reduces your take-home pay overall — it only raises the rate on the portion of income above that threshold. Figures below reflect single-filer brackets for the current tax year.
Bar widths are illustrative of relative scale, not to a linear dollar axis. Single-filer figures shown; married and head-of-household thresholds differ.
Standard vs. itemized deductions, compared directly.
Standard Deduction
A fixed dollar amount set by filing status. No receipts or itemized tracking required.
Best fit: most filers without large deductible expenses in a given year.
Run the estimator →Itemized Deductions
A total of specific eligible expenses, claimed instead of the standard amount when it's higher.
Best fit: filers whose eligible expenses clearly exceed the standard deduction for their status.
Compare against your numbers →HSA and FSA savings
Health Savings Accounts offer a distinct combination: contributions reduce taxable income, growth isn't taxed, and qualified withdrawals aren't taxed either. Flexible Spending Accounts reduce taxable income too, but generally follow a use-it-or-lose-it timeline within the plan year.
$4,150
HSA limit, self-only coverage
$8,300
HSA limit, family coverage
Capital gains & tax-loss harvesting
Assets held over one year qualify for long-term capital gains rates, which are generally lower than ordinary income rates. Tax-loss harvesting sells losing positions to offset realized gains elsewhere, subject to wash-sale rules that disallow the loss if a substantially identical position is repurchased too soon.
0%
Lower income tiers
15%
Middle income tiers
20%
Highest income tier
Traditional, Roth, and the conversion question.
Traditional 401(k) and IRA contributions reduce taxable income today, with withdrawals taxed in retirement. Roth accounts work in reverse: contributions don't reduce current income, but qualified withdrawals are tax-free. A Roth conversion moves existing traditional balances into a Roth account, triggering tax on the converted amount now in exchange for tax-free growth afterward.
The conversion tends to make the most sense in years where current income — and therefore the marginal tax rate on the conversion — is unusually low relative to expected retirement-year income.
Model a conversion in the calculator →A practical order of operations for surplus cash.
Employer match
Contribute enough to capture the full 401(k) match before anything else.
Step 2High-interest debt
Pay down balances typically carrying rates above 7–8% APR.
Step 3Emergency reserve
Build toward three to six months of essential expenses.
Step 4Additional investing
Direct remaining surplus toward tax-advantaged or taxable accounts.