How we calculate
The formula behind every Sproutcalc tool, the IRS source for each number, and our results against the IRS's own worked examples.
Last updated
Principles
- We only use figures published by the IRS, Treasury, the Federal Register or the law itself.
- Calculations run in your browser. We don't store what you type.
- Where a rule depends on facts we can't see, like your full return, we say so beside the result.
Formulas
| Tool | Formula | Source |
|---|---|---|
| Overtime | min(premium, $12,500 or $25,000 joint) minus $100 per full $1,000 of MAGI over $150,000 ($300,000 joint) | Notice 2025-69, Schedule 1-A Part III |
| Tips | min(qualified tips, $25,000) minus $100 per $1,000 of MAGI over $150,000 ($300,000 joint); self-employed capped at net income | IRB 2026-18, Schedule 1-A Part II |
| Car loan interest | min(interest, $10,000) minus $200 per $1,000 or part of $1,000 of MAGI over $100,000 ($200,000 joint) | IRB 2026-39, Schedule 1-A Part IV |
| Seniors | $6,000 per eligible person minus 6% of MAGI over $75,000 ($150,000 joint) | Pub 554, Schedule 1-A Part V |
| Trump Account growth | Deposit and yearly contributions compounded annually at the return you choose, contributions capped at $5,000 a year | Form 4547 instructions |
| Tax saved | Deduction × the bracket you choose. Your real saving depends on your full return |
Tested against IRS examples
These tests run every time the site is rebuilt. If one fails, the change doesn't go live.
| Tool | IRS example | IRS answer | Our result | Source |
|---|---|---|---|---|
| Car loan interest | Final regulations, example: $7,000 of interest after the $10,000 cap, MAGI $24,200 over $100,000 | $2,000 (cut by $200 × 25) | $2,000✓ Matches | IRB 2026-39 |
| Tips | Final regulations, example: single filer, MAGI $50,000 over $150,000 | Cut of $5,000 ($100 × 50) | $5,000✓ Matches | IRB 2026-18 |
| Overtime | IRS FAQ: employer reports $30,000 in W-2 code TT | Deduction capped at $12,500 | $12,500✓ Matches | FS-2026-13 |
| Overtime | IRS FAQ: $10,000 paid, W-2 shows $5,000, no W-2c issued | Only $5,000 can be used | $5,000✓ Matches | FS-2026-13, Q22 |