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Applying for no-interest student loans can significantly reduce the cost of earning a degree, making higher education more accessible without the long-term burden of accumulating interest. These unique funding options — typically offered by nonprofit organizations, state programs, and select institutions — allow eligible students to borrow responsibly while keeping repayment affordable and predictable.

While these loans are relatively rare, and amounts tend to lower than other types of student loans, no-interest student loans do exist and may be worth looking into for the potential savings. Read on to learn how interest-free student loans work and where to find them.

What Is a No-Interest Student Loan?

Interest-free student loans are loans that do not accrue interest. Unlike grants and scholarships, the loan amount must be repaid, but because there are no interest charges, the amount repaid by the borrower remains the same as the original amount borrowed. Traditional student loans, whether federal or private, all come with interest rates that are either fixed or variable.

The interest rates on federal student loans are fixed and are set annually by Congress. For the 2025-2026 school year, the interest rate on Direct Subsidized or Unsubsidized Loans for undergraduates is 6.39%, the rate on Direct Unsubsidized Loans for graduate and professional students is 7.94%, and the rate on Direct PLUS Loans for graduate students, professional students, and parents is 8.94%.

While federal student loan rates are the same for every borrower, private student loan rates range based on the lender, the type of interest rate (fixed or variable), and the borrower’s credit score. Interest on private student loans can run anywhere from 3.19% to 17.95%, according to Education Data Initiative.

Whatever the interest rate on a student loan, you will end up paying more than you borrow. No-interest student loans can be an attractive alternative. Here are some places to look for interest-free loans:

•   Schools: Some colleges and universities offer no-interest loans for current students to cover emergency expenses.

•   States: You may be able to find an interest-free student loan through your state’s education agency. For example, Massachusetts offers students who demonstrate financial need and attend a qualifying school in Massachusetts a no-interest loan for up to $4,000 each academic year.

•   Nonprofit organizations: Some foundations and nonprofits offer no-interest student loans. These loans can be set up in different ways. In some cases, you can get a small loan amount; in others, the organization will pay your remaining cost of attendance. Some are awarded based on merit, while others are awarded based on financial need.

Applying for Interest-Free Student Loans

The application process for most interest-free loans resembles the application process for grants or scholarships more closely than a traditional loan application.

It’s a good idea to fill out the Free Application for Federal Student Aid (FAFSA®), even if you want to focus on loans without interest. The FAFSA determines your eligibility for federal aid, including grants, scholarships, and federal student loans. Some interest-free loans use the FAFSA to determine financial need.

And while federal loans do accrue interest, they typically have lower rates than private student loans. Federal student loans also come with benefits, such as income-based repayment and forgiveness programs, that private student loans and no-interest loans may not offer.

Interest-free student loans are often local and state-based, rather than national. They may require proof of residency in a certain state. Some may also have an essay requirement, academic requirements, and might even require an interview.

The process is usually more intense than regular student loans because funds are limited. Some state agencies and philanthropic organizations use the term “scholarship loan” to refer to interest-free loans. Scholarship loans may also be repaid through public service.

Keep in mind though that those organizations are still separate from the government, and do not offer the same repayment plans as the loans offered through the U.S. Department of Education.

Recommended: Student Loan Interest Deduction

Subsidized Loans: No Interest Until After Graduation

Interest-free loans are relatively rare, so it’s possible that students will still need to rely on federal student aid. There are two types of federal Direct Loans available to undergraduate students: subsidized and unsubsidized.

Subsidized loans are available to undergraduates who demonstrate financial need. The U.S. Department of Education pays the interest accruing on the loans while you’re in school, during your six-month grace period, and when your loans are in deferment.

On the other hand, unsubsidized loans are available to undergraduate and graduate students, and they don’t require that students demonstrate need in order to qualify. Interest accrues while you’re in school and during grace periods, deferment, or forbearance — and you’re responsible for paying the interest.

Federal student loans also offer a few different payment plans, including income-driven repayment plans, so that borrowers can find the option that works best for them. There are also borrower protections like deferment or forbearance that can act as a safety net for those who find themselves facing financial difficulties down the road.

The Takeaway

No-interest student loans, sometimes called scholarship loans or interest-free loans, are loans that do not accrue interest at all. While not common, there are some nonprofits, state agencies, schools, corporations, and religious organizations that offer interest-free loans to students.

In case you’re not able to find or qualify for a no-interest loan, it’s a good idea to fill out the FAFSA to access other forms of financial aid, including grants, scholarships, and federal student loans.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.

FAQ

What is a zero-interest student loan?

A zero-interest student loan is a loan where you borrow money for your education but aren’t charged any interest — so you only repay the principal amount you borrowed.

Who can qualify for zero-interest student loans?

Typically, these loans go to low-income students, residents of certain states, or borrowers who meet specific financial-need criteria or eligibility requirements set by nonprofit or state programs.

Where can students find zero-interest loan programs?

Many are offered through state-funded programs — for example, state-administered no-interest loan initiatives — or through nonprofit organizations dedicated to making higher education more affordable.

About the author

Julia Califano

Julia Califano is an award-winning journalist who covers banking, small business, personal loans, student loans, and other money issues for SoFi. She has over 20 years of experience writing about personal finance and lifestyle topics. Read full bio.

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Please borrow responsibly. SoFi Private Student loans are not a substitute for federal loans, grants, and work-study programs. We encourage you to evaluate all your federal student aid options before you consider any private loans, including ours. Read our FAQs.

Terms and conditions apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. SoFi Private Student loans are subject to program terms and restrictions, such as completion of a loan application and self-certification form, verification of application information, the student's at least half-time enrollment in a degree program at a SoFi-participating school, and, if applicable, a co-signer. In addition, borrowers must be U.S. citizens or other eligible status, be residing in the U.S., Puerto Rico, U.S. Virgin Islands, or American Samoa, and must meet SoFi’s underwriting requirements, including verification of sufficient income to support your ability to repay. Not all repayment options may be available for all loans. Minimum loan amount is $1,000. See SoFi.com/eligibility for more information. Lowest rates reserved for the most creditworthy borrowers. SoFi reserves the right to modify eligibility criteria at any time. This information is current as of 3/2/2026 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org).

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SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SOISL-Q425-052

Once you begin looking for financing options, you may find your search leads you to multiple forms, including personal loans. One choice available to prospective borrowers is a short-term loan.

A short-term loan is a personal loan that can help with personal financial needs. But this type of loan may not fit every situation, since it typically only provides limited funds. Read on to find out whether a small-term loan may help you meet your financial goals.

The Basics on Short-Term Loans

When you take out a short-term loan, you borrow funds to address immediate financial needs for a limited period. These loans serve a variety of functions, depending on your situation. For example, individuals may take out a short-term loan to keep them afloat until their next paycheck.

Or, someone running their own business who needs to cover small expenses may take out a short-term business loan.

Recommended: Personal Loan Guide for Beginners

How Does A Short-Term Loan Work?

Essentially, small-term loans operate on a short time scale. The approval process and repayment schedule occur quickly, usually within a year.

Average personal loan interest rates range from an annual percentage rate (APR) of 5.99% to 36%, depending on the applicant’s creditworthiness. Short-term loans tend to be near the higher end of this scale, in addition to fees and penalties that may be charged by a lender.

However, lenders such as banks or credit unions offer varying personal loan terms and rates. So, it’s important to research and shop around before you apply for one.

What Can You Use a Short-Term Loan For?

Short-term loans can be used for many purposes when you need quick access to money and your cash flow is low. You can use the funds from a short-term loan to cover unexpected costs such as medical bills or for everyday expenses until you reach your next paycheck.

Businesses might use short-term loans in the form of merchant cash advances so they can replenish inventory or purchase new equipment even when short on cash. In this scenario, the business receives a lump sum of cash from a lender and repays it with a percentage of credit or debit card sales until the advance is paid in full.

A bank overdraft can be considered a short-time loan the bank provides when your account balance isn’t sufficient to pay for a purchase you’ve made. In this scenario, your account lacks funds to make a payment, but the bank lends you that money. In return, you pay a fee.

Recommended: Guarantor vs. Cosigner: What Are the Differences?

How Long Is a Short-Term Loan?

Every loan varies based on the lender and applicant. Often, short-term loans mature within a year or less. However, it is possible to find a short loan term that extends up to two years. A long-term personal loan is an alternative if two years is too brief a repayment time frame.

Characteristics of Short-Term Loans

Short-term loans have unique features, such as:

•   Smaller borrowing amounts compared to other loans.

•   Typically offered as unsecured loans.

•   High annual percentage rates (APRs).

•   Short repayment periods.

•   Sometimes weekly payments are required.

Benefits of a Short-Term Loan

Short-term loans come with certain disadvantages, mostly due to their high interest rates. But they can be helpful if you find yourself in a tight spot. Some benefits include:

High Approval Rates

Since short-term loans only provide limited funds, the lending requirements may be easier to meet. Because of that, more applicants have a chance of approval. Even though you may not need a stellar credit score, you could still have some trouble if you have a low credit score. Your lender may ask for proof of a steady income, among other criteria.

Online Application

Short-term loans are also easy to access. Lenders often offer online applications, so there’s no need to visit a brick-and-mortar office. Applications are typically easy to fill out, taking only minutes to complete.

Quick Access to Funds

The short-term loan processing time is usually fast. As a result, you will probably receive approval and loan proceeds faster than you would for a long-term loan. They might be a good option if you have an unexpected expense you need to pay as soon as possible.

Lower Accrued Interest

While short-term loans can come with high interest, they generally have a short time frame. Because of that, there are fewer total interest payments. As long as you pay on time, you could save money on built-up interest with a short-term loan.

Lower Credit Score Requirements

As mentioned above, you don’t typically have to have an excellent credit score to get approved for a short-term loan. Applicants with average credit scores may also be able to usually qualify for a short-term personal loan.

No Collateral

When it comes to the difference between a secured vs. unsecured loan, a secured loan means more risk on the borrower’s part. That’s because a secured loan requires collateral, such as your car or your home. But most lenders don’t require collateral for a short-term personal loan because it doesn’t carry enough risk.

Disadvantages of a Short-Term Personal Loan

While short-term loans are easier to qualify for, they may not be the right choice for everyone. Here are some drawbacks to be aware of:

Lower Limit

For borrowers who need a significant amount of money, a short-time loan may not be the right choice. The borrowing limits for these types of loans tend to be small, sometimes just a few hundred dollars, to make it easier to pay off in a short amount of time. How much you can borrow with a personal loan will ultimately depend on your credit score, other debts, income, and the lender’s internal rules.

May Lead to a Cycle of Debt

Because of the high-interest rate and steep fees attached to short-term loans, they really aren’t long-term solutions. They might be an option in an emergency but can lead to a cycle of debt if relied on too often.

Types of Short-Term Loans

There are a few variations on the short-term loan available. The type of personal loan you apply for will generally depend on the amount of cash you want and how quickly you need it. Here are different short-term borrowing options:

Payday Loans

A payday loan is a very-short-term loan that some people use to tide themselves over financially until their next paycheck. The funds are meant to be repaid at the time of the borrower’s next payday — thus, the name. However, payday loan issues arise if the borrower can’t repay the loan in the short time frame required.

Installment Loans

Installment loans give borrowers a way to access a lump sum of money that’s repaid in monthly installments over a set time frame. A fixed-rate loan with steady monthly payments makes budgeting during the repayment period more convenient.

Lines of Credit

A line of credit is similar to a credit card. You receive a credit limit and can tap into the line of credit as needed. Funds can be taken out in installments of the amount needed at the time they’re needed. But you can’t surpass your limit, which the lender bases on your creditworthiness.

Merchant Cash Advance

Merchant cash advances are used by businesses that make mainly debit or credit card sales. As a means to secure cash, the business will borrow a lump sum, which is advanced against the business’s daily sales. The lender is then repaid through a certain percentage of the business’s daily sales.

Invoice Financing

Similar to merchant cash advances, invoice financing is a type of short-term loan that can help business owners meet financial needs. The business submits unpaid invoices, i.e., accounts receivable, to a lender as collateral. The lender charges a fee for the financing and can collect on the invoices if the borrower defaults.

Short-Term Loan vs Long-Term Loan

It’s always important to know your options. Short-term loans probably aren’t the right choice if you need a large amount of funds in a lump sum or will need to periodically draw small amounts from a set amount of credit. In these situations, a long-term loan might be a better solution.

Like any form of financing, personal loans have pros and cons. Long-term personal loans can sometimes have high interest rates depending on the applicant’s credit score and other factors used by the lender. They may not require collateral, which makes them seem risky to lenders.

Which Is Right for You?

Here’s a breakdown of how these two loans stack up against each other:

Typical Requirements to Get a Short-Term Loan

Requirements to be approved for a short-term loan vary by lender, but most lenders will evaluate your creditworthiness in some way. Generally, a higher credit score will likely secure you better terms and interest rates. You also need to be able to show your lender a range of personal and financial information. Typical personal loan requirements include proof of identity, verification of employer and income, and proof of current address.

Can I Get a Short-Term Loan With Bad Credit?

While short-term loans don’t typically require excellent credit, the higher an applicant’s credit score, the better their chances of approval. A lender may also offer more favorable interest rates and terms to a borrower with a higher score. Since short-term loans are often for relatively small amounts of money, requirements tend to be more relaxed.

Personal Loan Options From SoFi

If you’re looking to borrow money and wondering where to get a personal loan, make sure you understand what a personal loan is before you move forward. SoFi offers personal loan options to fit a variety of financial situations and needs. With competitive interest rates and a range of terms, there may be a SoFi personal loan that works for you. SoFi does not charge hidden fees on personal loans, many borrowers only repay the loan principal plus interest. A personal loan calculator can help you compare loan options and figure out monthly payments.

The Takeaway

What is short-term lending? It’s a small loan that’s designed to be repaid quickly, usually within 12 to 18 months and sometimes in as little as two weeks. Short-term personal loans vary based on your financial situation and the lender you use. Some lending institutions use high interest rates and hidden fees that can add to the overall cost of a short-term personal loan. That doesn’t make the loan bad, but it’s important to be aware of what you’re agreeing to when you borrow money.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.

FAQ

What is short-term lending?

Short-term lending is any loan that has a very brief repayment period, typically under 18 months and in some cases as little as two weeks.

How do short-term loan interest rates compare to long-term loans?

Short-term loans typically have higher interest rates than longer-term ones because there is often more risk involved for the lender, and the lender has a shorter period of time in which to profit off the loan.

What credit score do I need for a short-term loan?

The credit score needed for a short-term loan will depend on the source of the loan and the lender’s policies. It may be possible to get a short-term loan with a poor credit score (under 600). And payday lenders usually don’t check the credit score at all. However, they may charge much higher fees than other types of lenders.

Can I pay off a short-term loan early?

It may be possible to pay off a short-term loan early, however some lenders have early payment penalties. Check your loan agreement for details.

What happens if I can’t repay a short-term loan on time?

Failing to make payments on a short-term loan will lead to different results depending on the type of loan you have. Many payday loans (and their associated fees) automatically renew if they are not repaid on time. Fees can grow so fast and so high that the borrower has difficulty getting out of a financial hole. Other loans may not automatically renew, but borrowers may find themselves in collections or in court, and could see long-term damage to their credit score. If you are having difficulty making payments, don’t wait: Contact your lender to try to work out a payment plan.

Photo credit: iStock/kitzcorner

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SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

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The amount you’ll end up paying in income taxes doesn’t have to remain a mystery until you complete your federal return.

With a fundamental understanding of how taxes work and some basic information about your household, you may be able to estimate what your tax liability or refund will be. And with that knowledge, you can better plan your finances for 2026 and 2027.

Read on for a look at what your 2026 taxes might look like, and how your income, filing status, and other factors can impact your bottom line.

What Is an Income Tax Calculator?

A federal tax calculator for 2026 can help you estimate the federal tax you may owe on the income you earn this year. It isn’t meant to replace the tax service or software you usually use to complete your return. But it could help you plan ahead and make informed choices as you prepare for a potential tax bill, or refund, when you file in 2027.

Historical Tax Rates, Compared

Most people think taxes are too high now, but they could be — and have been — much higher. In 2026, the top tax rate is 37% for individuals whose taxable income is over $640,600 ($768,700 for married couples filing jointly). But in 1944, the highest rate — for anyone who made over $200,000 — was 94%. It wasn’t until 1987 that the top rate dropped below 40%.

The current rates, dictated by the Tax Cuts and Jobs Act of 2017, were made permanent in 2025. The tax code, officially called the Internal Revenue Code, is interpreted and implemented by the U.S. Treasury Department and the Internal Revenue Service (IRS), but tax laws are written by Congress.

How Is the Tax Rate Decided?

There are seven federal income tax rates: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. The more taxable income you have, the more you can expect to pay.

That’s because in the U.S., income tax rates are graduated, which means each of these progressively higher tax rates is assigned to a specific income range, rather than a household’s entire taxable income. Each time your taxable income reaches a new level, you’ll pay a higher rate, but only on the portion that’s in that range.

The ranges, or brackets, differ depending on a taxpayer’s filing status (single, married filing jointly, married filing separately, or head of household), as seen in the table below.

Income Tax Rates and Brackets for 2026 Tax Year

If you’re a single filer with $60,000 in taxable income in 2026, for example, you won’t pay your highest tax rate (22%) on that entire amount. You’ll pay 10% on up to $12,400 of your taxable income; 12% on the amount between $12,401 to $50,400 ($38,000); and 22% on the amount between $50,401 and your taxable income of $60,000 ($9,600).

Recommended: How Much Do You Have to Make to File Taxes?

How to Calculate Federal Taxes in 2026-2027

Determining your income tax each year is, of course, much more complicated than simply applying the various tax rates to the money you’ve earned.

Depending on the complexity of your return, it may take several calculations to come up with the final amount you owe — or what you’ve overpaid and can expect to be refunded. Whether you’re filing taxes for the first time or you’ve been paying income taxes for years, here’s a quick summary of the basic steps that may go into figuring out your federal taxes in 2026-27:

1. Calculate Your Gross Income

This is the total of all the money you made for the year. Think income from your job, including tips; business income; dividend and interest income; etc.

2. Determine Your Adjusted Gross Income (AGI)

Once you know your gross income, you can subtract certain adjustments, such as alimony payments, student loan interest, health insurance premiums (if you’re self-employed), some retirement contributions, and more to determine your AGI.

3. Subtract Applicable Deductions

A tax deduction is an amount you can subtract from your AGI to further reduce your income and lower your tax. You can either choose to list, or itemize, all the tax deductions that apply to you, or you can take the standard deduction. Most taxpayers go with the standard deduction, which for tax year 2026 is:

•   $16,100 for single filers and married individuals filing separately;

•   $24,150 for heads of households; and

•   $32,200 for married couples who file jointly.

However, you may want to run the numbers to see if it makes sense to go with itemized deductions. Some common deductions that must be itemized but could help further reduce your tax burden include mortgage interest, charitable contributions, and medical and dental expenses. But there are many more options to choose from.

4. Apply the Appropriate Tax Rates from the Table

Once you’ve calculated your taxable income, you can apply the 2026 tax rates. Remember, your entire taxable income won’t be taxed at the same rate; the tax rate goes up at various levels, or brackets.

5. Use Any Applicable Tax Credits

Unlike tax deductions, which reduce how much of your income is subject to taxes, tax credits directly reduce dollar-for-dollar the amount of tax you owe. When you’re preparing for tax season, your tax professional or tax software can help you find your applicable tax credits.

Some common credits include the Child Tax Credit, education credits, the Saver’s Credit for retirement savings contributions, and the premium tax credit that helps eligible individuals and families cover the premiums for their health insurance purchased through the federal marketplace.

6. Don’t Forget What You’ve Already Paid

Keep in mind that you’ve likely had money withheld from your paychecks throughout the year to put toward your federal income tax. Or, if you’re self-employed, you may have been making quarterly estimated tax payments. Once you know what you owe (after applying tax credits), you can subtract what you’ve already paid to get a final tax amount. If the number is positive, you can expect to owe the IRS. If it’s negative, and your calculations are correct, you can expect to get a refund.

How Much Does the Average American Pay in Taxes?

A Tax Foundation analysis of the most recent available data from the IRS (2022) found that the average tax rate for all U.S. taxpayers was 14.5%, and the average amount of income taxes paid was $13,890. The highest-earning Americans paid an effective average tax rate of 26%, while the bottom 50% paid 3.74% of their income to the IRS.

Of course, there are other types of taxes you may also have to pay, including sales tax, property tax, state and local taxes, estate tax, and more. And this means taxes can eat up a hefty portion of your hard-earned money.

Need help managing your finances? A money tracker can help you keep tabs on where your money is coming and going.

Example Tax Scenarios

Your federal income tax bill each year will depend on several factors, including your gross income, your filing status, the deductions and credits you can use to lower the amount you owe, and what you’ve already paid during the year. Here are two basic examples of how taxes might be calculated in 2026 for a single filer with a salary of $80,000 and a married couple with a gross household income of $120,000.

Joe, the Single Filer

Joe has a salary of $80,000 in 2026, so his gross income is $80,000.

He decides to go with the standard deduction in 2026, which is $16,100 for a single filer. This brings his taxable income to $63,900.

Joe then uses the applicable tax brackets.

•   The first layer of Joe’s taxable income, up to $12,400, is taxed at 10%, which comes to $1,240.

•   The next layer of Joe’s taxable income, from $12,401 to $50,400, is taxed at 12%, which comes to $4,560.

•   The next layer of Joe’s taxable income, from $50,401 to $63,900 is taxed at 22%, which comes to $2,970.

Joe would have a total federal income tax of $8,770.

Joe finds a couple of credits he can apply that take another $1,000 off of his tax bill. And he figures out that he will have paid $6,000 in federal income tax withholding for the year.

Joe estimates that he’ll owe $1,770 when he files his taxes 2027, and he’s building that into his budget so that he’s prepared when it’s time to pay. (Tip: An online budget planner can take the guesswork out of budgeting.)

Mary and Sam, Married Filing Jointly

Mary and Sam’s combined salaries in 2026 equal $120,000, so their gross income is $120,000.

They don’t have any kids yet, and they haven’t yet purchased a house. So, they decide to use the standard deduction in 2026, which is $32,200. This brings their taxable income to $87,800.

According to the applicable tax brackets:

•   The first layer of their taxable income, up to $24,800, is taxed at 10%, which comes to $2,480.

•   The next layer of their taxable income, from $24,801 to $87,800, is taxed at 12%, which comes to $7,560.

Mary and Sam would have a total federal income tax of $10,040.

Mary and Sam think they’re eligible for $2,000 in tax credits that they can take off their tax bill. And between them they will have paid $10,000 in federal withholding in 2026.

Mary and Sam estimate that they’ll get a refund of $1,960 when they file their 2026 tax return, and they plan to put that refund toward a down payment on a house in 2027.

Recommended: What Tax Bracket Am I In?

How Federal Taxes Impact You

The U.S. tax system is the federal government’s single largest source of revenue, and compliance with federal tax laws is mandatory. The money taxes bring in is meant to finance various public services, including veterans’ benefits, Social Security, health programs, national defense, education, transportation, and more.

That said, there’s a popular quote from an old Morgan Stanley ad that says: “You must pay taxes. But there’s no law that says you gotta leave a tip.”

For high earners, especially, taxes may be one of the most significant expenses they encounter each year and over their lifetime. But all taxpayers can benefit from understanding how taxes work and from the type of proactive planning that can help them legally hold on to more of their money. Staying on top of any changes can also help you avoid common tax filing mistakes, as many deductions, credits, and income thresholds are adjusted annually for inflation.

The Takeaway

If you have an idea of how much you’ll bring in from various income streams this year, and you’re aware of some of the basic deductions and credits that might reduce the amount you’ll owe, you can use the 2026 brackets to calculate a pretty good tax estimate.

Whether you expect to pay when you file your return or you think you’ll get a refund, calculating your tax bill in advance can help you budget appropriately. And you may even find some additional savings in 2026 and beyond.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

FAQ

What will the tax brackets be for 2026?

The IRS has already published the 2026 tax rate table for single filers, married couples filing jointly, married couples filing separately, and heads of household. Each bracket has been adjusted slightly to reflect inflation.

How can you calculate estimated tax payments for 2026?

To calculate your estimated tax, you must figure your expected adjusted gross income, taxable income, deductions, and credits for the year.

Will tax returns be bigger in 2026?

Some taxpayers may qualify for a larger refund on their 2026 return (due in April 2027), thanks to inflation-related adjustments to the tax brackets and standard deduction amounts. Changes to the tax laws could also impact 2027 returns (due in April 2028), but it’s harder to predict what tax bills will look like at that time.

How much is the standard deduction for 2026?

The standard deduction amount depends on your filing status. In 2026, the standard deduction will be $16,100 for single filers and married individuals filing separately; $24,150 for heads of households; and $32,200 for married couples who file jointly.

What is the tax offset for 2026?

A taxpayer’s offset amount can vary depending on the type of debt that is owed.

What is the filing deadline for 2026 federal tax returns?

Federal income tax returns for 2026 are due on Thursday, April 15, 2027.

Photo credit: iStock/Anastasiia Makarevich

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Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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A tax refund can come as welcome news when it’s time to file your return. But how much can you expect to get back each year? A tax refund calculator can help you figure that out.

Learn how a tax refund calculator works, plus what details impact whether or not you’re overpaying the federal government.

What Is a Tax Refund Calculator?

A federal tax refund calculator looks at your gross income for the year — that’s the amount you earned before any tax withholdings from your paycheck. Then it factors in deductions, including standard or itemized deductions, eligible retirement account contributions, HSA contributions, and any applicable tax credits.

Next, it applies the appropriate tax bracket to your final taxable income to determine how much you owe for the year. Finally, it will subtract any tax payments you made throughout the year, such as those through paychecks or estimated tax payments, from your owed amount. If you overpaid, you’ll be repaid the difference in the form of a tax refund.

How to Track Your Tax Refund

As you prepare for tax season, it helps to understand how long it will take to receive your refund after you file taxes. That way you can account for the funds in your online budget planner for the right time frame, rather than incorrectly assuming when you’ll have that extra cash in the bank.

You can check your federal refund through the IRS website. The information is available more quickly when you e-file your tax return. You can start tracking within 24 hours for a current tax year return or up to four days after e-filing a previous year’s return. If you file a paper return, it can take as long as four weeks to see your refund status.

When you visit the IRS website, be prepared to provide a few basic pieces of personal information: your Social Security number or individual taxpayer ID number; filing status; and the exact refund amount from your return. One of the most common tax filing mistakes is to input the wrong Social Security number, so check your return and refund request carefully before submitting.

How to Calculate Federal Tax Refunds in 2026-2027

Your actual refund amount may vary every year based on changes in your income, eligible deductions, and IRS changes to income tax rates and brackets. So only use a 2025 tax refund calculator for that year’s return, then look for a tax refund calculator for 2026 for this year.

The actual calculation depends on the complexity of your income. For instance, it’s much simpler if you only have W2 income that you’ve already paid taxes on. It can get a little more complicated if you also have things like taxable investment income and self-employment income.

Start with the IRS tax refund calculator to estimate the correct federal income tax withholding. Then you can determine whether or not you’ll get a refund based on how much you’ve already paid throughout the year.

Recommended: 13 Steps to Prepare for Tax Season

How Is the Tax Refund Determined?

The size of your tax refund is determined by the amount of taxes already withheld and the actual tax you owe. If you’ve overpaid throughout the year, the government issues a refund. This applies to several types of taxes, including income taxes and capital gains tax.

On the IRS tax refund calculator for 2025-2026, you’ll need to provide information such as:

•   Tax filing status

•   Eligible tax deductions or credits

•   Sources of income

•   Salary or wages

•   Tax withholdings

•   Estimated tax payments

Once you enter in all of the information, you’ll see your expected tax withholding, how much you will likely owe in taxes, and your projected refund.

Average American Tax Refund

Here is the average federal tax refund by year, using IRS data from late April each year.

More than 102 million tax refunds were processed by October 2025, for a grand total of $311.6 billion. The vast majority is refunded via direct deposit.

The average tax refund varies by location. Here’s a comparison of what the average taxpayer in each state received as a refund in 2022, the latest data available.

Example Tax Refund Scenarios

There are several scenarios in which your withholding total is more than you actually end up owing on your tax return. This is usually due to tax deductions and credits. Here are some examples:

•   Tax credits: There are several tax credits that can lower the amount you owe, including the child tax credit and the earned income tax credit. For instance, in 2026, the child tax credit allows eligible taxpayers to deduct up to $2,200 per child who is 16 years or younger. Up to $1,700 can be taken as a refund. So for a family with two kids, that could add as much as $3,400 to your refund (if not already accounted for in your withholding).

•   Tax deductions: Nearly 90% of taxpayers take the standard deduction instead of itemizing eligible deductions. In 2026, the standard deduction is $16,100 for single taxpayers, and $32,200 for those who are married and filing jointly. That can greatly reduce the amount of taxable income you have — and could even drop you into a lower tax bracket.

Another example of a refund is paying taxes when you don’t actually earn enough to owe. There’s a minimum for how much you have to make to file taxes for each filing status.

Recommended: 10 Personal Finance Basics

How Tax Refunds Impact You

It’s usually good news to find out you’re getting a tax refund instead of owing more on your federal return, especially if you’re filing taxes for the first time or recently increased your income. However, it’s also important to consider that when you get a refund every year, you’re essentially overpaying your taxes. Instead of getting a large lump sum after filing, you could adjust your withholding to enjoy a larger paycheck each month.

When you do get a tax refund, resist the urge to immediately spend it and instead make a strategic plan for the extra funds. One potential money move to make is to pay off high-interest debt like credit card balances. A credit monitoring service can show you your current credit score and what actions can improve it. If you have a lot of outstanding revolving credit, using your tax refund to pay off a chunk could boost your score.

The Takeaway

A tax refund calculator can be a helpful tool in figuring out if you can expect any money back after filing your taxes. But keep in mind that you’ll need a smart financial plan anytime you get a windfall amount of cash.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

FAQ

When can I expect my tax refund 2026 IRS?

Most federal tax refunds are sent within 21 calendar days of filing your return. The fastest way to get your refund is to e-file and choose direct deposit.

Will tax refunds be bigger in 2026?

You could get a bigger tax refund in 2026 if your income doesn’t increase. That’s because deductions and tax bracket incomes increase each year in order to account for inflation.

Are we getting a Child Tax Credit in 2026?

Yes, the Child Tax Credit is still in place for 2026.

Why is my refund so low in 2026?

There are a few different reasons why your refund could be low in 2026. You may not have withheld enough, or some of your deduction and credit eligibility may have changed. If you earned more for the year, you may owe more taxes on that income, resulting in a lower refund.

How long is it taking to get tax refunds in 2026 with a child?

The typical refund timeline for the IRS is 21 days or less, regardless of whether you have a child dependent.

What is the tax offset for 2026?

If you owe any money to the federal government but have a tax refund, they may withhold that money as an offset to put toward the existing debt. This can include things like past-due child support, federal agency nontax debt, and even state income tax debt.

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Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

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Your tax bracket reflects the rate you’re taxed, based on your income, and there are currently seven of these ranges. The U.S. uses a progressive tax system; as income rises, so does the tax rate that applies to each layer of income reported on your return.

If you are wondering what the tax brackets for 2025 are, that’s an important question, as the income ranges used to determine your bracket are adjusted periodically by the Internal Revenue Service (IRS) to reflect the impact of inflation.

The tax brackets 2025 filers are assigned to correspond to these federal income tax rates: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. Income ranges used for 2025 tax brackets apply to returns filed in 2026.

2025 Tax Brackets

To find out what tax bracket you are in, check the following table. It illustrates 2025 federal tax brackets and tax rates, based on your filing status.

Recommended: How Much Do You Have to Make to File Taxes?

2026 Tax Brackets

While tax rates for the brackets are the same for 2025 and 2026, the income ranges used to determine tax brackets differ. Here’s a look at 2026 tax brackets so you can see how they compare to federal tax brackets in 2025. The amounts have been adjusted to reflect the impact of inflation.

Knowing how tax brackets work can help you gain a better picture of your income (gross vs. net), which impacts your spending and your savings. This can help you keep an eye on your budget. Using a money tracker can be a smart move, too. This tax bracket knowledge may be especially important for self-employed people who pay taxes quarterly vs. having an employer withhold taxes for them.

The federal government uses a progressive tax system to determine how much individual taxpayers owe. This type of system functions by taking a larger percentage of income from higher earners than lower earners, based on the concept of ability to pay.

Tax brackets assign a tax rate to a specific range of income. Each income range is subject to a different tax rate ranging from 10% to 37% for the 2025 and 2026 tax years. There are seven tax rates, as mentioned, with individual tax brackets for five filing statuses:

•   Single

•   Married filing jointly

•   Married filing separately

•   Head of household

•   Qualifying widow(er)

Some overlap exists across different filing statuses. For instance, single filers and married couples who file separately have identical tax bracket income ranges up to the 35% tax rate. At that point, the range of incomes diverges.

What are the income tax brackets for 2025 at the state level? It varies.

Forty-one states and the District of Columbia assess an income tax. Among them, 14 states use a flat tax rate that applies to all income levels, while the remaining 27 and the District of Columbia use graduated tax rates assigned to different tax brackets.

Also, note that there are different types of taxes. Tax brackets and tax rates for individuals are not the same as tax rates for corporations.

If you need help tracking your money on an everyday basis (not just at tax time), you might try an online budget planner tool.

What Is a Marginal Tax Rate?

A marginal tax rate is the tax rate you pay on the last dollar of income earned. In other words, it reflects the highest tax bracket you’re assigned to based on your income and filing status.

So if you’re looking at 2025 tax brackets, a single filer reporting income of $100,500 would have a marginal tax rate of 22%. That represents the upper limit of what they’d pay in taxes but not what they would pay on their entire earnings (more on this below).

Note that marginal tax rates (and tax bracket income ranges) apply to all your taxable income for the year. Taxable income is any income you receive that is not specifically exempted from taxation by law, including:

•   Wages (which are typically paid on an hourly basis)

•   Salaries (which are typically paid in equal increments on a regular basis, such as biweekly)

•   Tips

•   Business income

•   Royalties

•   Fringe benefits

•   Self-employment earnings

•   Side hustle or gig work earnings

•   Interest earned on savings accounts

•   Earnings from the sale of virtual currencies

If you rent out a home you own, you’re also subject to taxes on investment property. It’s important to report all your income to the IRS, because negative consequences can follow if you don’t. Underreporting income is one of the biggest tax filing mistakes to avoid.

What Is an Effective Tax Rate?

Your effective tax rate is the percentage of tax owed on your taxable income for the year. It reflects the average tax rate you pay, based on how each layer of your income is taxed at different brackets. This concept may be confusing, especially if it’s the first time you are filing taxes.

It’s not unusual for your marginal tax rate and effective tax rate to differ. For example, a single filer with no dependents and a gross income of $100,500 (which is above the average salary in the U.S.) would have a 22% marginal tax rate for 2025.

But that would apply to the income that falls into the $48,476 to $103,350 bracket for their income. The first $48,475 would be taxed at a lower rate (the first $11,925 at 10%, and the amount between $11,926 and $48,475 at 12%). Their effective tax rate would be 16% after accounting for the standard deduction of $15,750 for a single filer. The standard deduction is a set amount you subtract from your taxable income, based on your filing status.

How to Reduce Taxes Owed

Landing in a lower tax bracket can help trim down what you owe. Here are a few strategies to reduce the amount of tax you have to pay.

•   Claim credits. Tax credits reduce your taxes owed on a dollar-for-dollar basis. So if you owe $500 in taxes, you might use a $500 tax credit to cancel that out. Some of the most common tax credits include the Earned Income Tax Credit (EITC), the Child Tax Credit (CTC), and the Retirement Savers’ Credit.

•   Use deductions. Deductions reduce your taxable income, which could automatically put you into a lower tax bracket. The IRS allows you to claim deductions for a variety of expenses, including student loan interest, interest on home equity loans or lines of credit if you use your loan for home improvement, traditional IRA contributions, and charitable donations.

•   Check your withholding. Your withholding is the amount of money you tell your employer to hold back for taxes. If you always owe taxes, you may need to adjust your withholding to make sure you’re paying the right amount each year. “It’s a good idea to check your pay stubs periodically to ensure that the deductions being taken out are accurate and align with your financial goals,” says Brian Walsh, CFP® and Head of Advice & Planning at SoFi. “To make sure the appropriate amount of taxes are being withheld from each paycheck, you may also want to revisit your W-4 annually and make any adjustments as your circumstances change.”

•   Defer compensation. This is another way to reduce taxes for the year. If you’re a freelancer, for example, you might hold off on invoicing clients in December and wait until January so you can carry that income over to the next year’s tax return.

If you’re preparing for tax season, talking to a financial advisor or tax professional can help you figure out the best approach to reduce what you owe, based on your situation.

Recommended: Monitor Your Credit Score

The Takeaway

Understanding how the federal tax brackets work can help you prepare your return with minimal stress. Taxes in the U.S. work on a progressive basis vs. a flat rate, and the more you earn, the more you typically pay. Knowing how the system operates and at what rate you are being taxed is an important part of managing your money and growing your wealth.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

FAQ

What are the 2025 federal income tax brackets?

The 2025 tax brackets assign seven tax rates based on your income and filing status. The tax rates for 2025 include 10%, 12%, 22%, 24%, 32%, 35%, and 37%, and the same levels are expected for 2026. The federal tax brackets for 2025 apply to returns filed in 2026. Your income plays a key role in determining at what percentage you are taxed.

What is the list of federal tax brackets?

The IRS maintains a list of tax rates and federal tax brackets for 2025, 2026 (both of which are 10%, 12%, 22%, 24%, 32%, 35%, and 37%), and beyond. If you know your taxable income for the year, you can estimate your marginal tax rate. You’ll need to calculate your taxes owed after deductions and credits to find your effective tax rate.

How do I know what tax bracket I am in?

Your income and filing status determine your tax bracket. Calculating your taxable income for the year can help you figure out which tax bracket you fall into.

How much federal tax should I pay on $50,000?

Assuming you’re a single filer with $50,000 in taxable income in 2025, you’d pay these tax rates: 10% on the first $11,925, 12% on $36,550, and 22% on the remaining $1,525. In total, your estimated federal tax due would be about $5,914.

How much federal tax would you pay on $100,000?

Assuming you’re a single filer with $100,000 in taxable income in 2025, you’d pay 10% on $11,925; 12% on $36,550 ($48,475 – $11,925); and 22% on $51,525 ($100,000 – $48,475). That would equal $16,914.

What tax bracket is $60,000 for married filing jointly?

Based on 2025 tax brackets, a married couple filing a joint return with $60,000 in taxable income would be in the 12% tax bracket, with the first $24,800 of their income taxed at 10%.

About the author

Rebecca Lake

Rebecca Lake has been a finance writer for nearly a decade, specializing in personal finance, investing, and small business. She is a contributor at Forbes Advisor, SmartAsset, Investopedia, The Balance, MyBankTracker, MoneyRates and CreditCards.com. Read full bio.

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