Tax on Interest Income Calculator
That 4.5% high-yield savings rate is pre-tax. Interest from savings accounts, CDs, and most bonds is taxed as ordinary income at your marginal rate — this calculator shows what you actually keep, including the extra Net Investment Income Tax for high earners.
How to use this calculator
- Enter interest income this year.
- Enter your taxable income (before this interest).
- Enter filing status.
- Your results appear instantly below and update as you change the numbers.
How this calculator works
Interest income is added to your other income and taxed at your marginal bracket — the same rate as a raise. For example, $2,500 of interest at a 22% marginal rate costs $550 in federal tax. Above $200,000 (single) or $250,000 (joint) of income, the 3.8% Net Investment Income Tax applies to the excess. Treasury interest is exempt from state tax.
Frequently asked questions
Do I get a form for this?
Yes — banks and brokers send Form 1099-INT for interest over $10, and the IRS receives a copy. Report it on Schedule B of your tax return.
Is my high-yield savings interest really taxed?
Yes, at your ordinary income rate — a 4.5% HYSA in the 24% bracket nets about 3.4% after federal tax. That is why the tax-equivalent yield calculator is useful for comparing savings options.
What interest is tax-free?
Municipal bond interest (federal-exempt), Treasury interest (state-exempt but federally taxed), and interest inside retirement accounts like an IRA. Everything else — savings, CDs, corporate bonds — is ordinary taxable income.
Disclaimer: Results are estimates for general information only and do not constitute financial, tax, or legal advice. Figures reflect 2026 rules and may change. Always confirm current limits and consult a qualified professional before making decisions. Official figures: IRS.gov · 2026 limits per IRS tax inflation adjustments.