Tax Projections Methodology
How we compute the tax burden you see in the chart.
Three confidence tiers
The tax-projection chart computes your federal, FICA, and state tax for every projected year — from your current age through your planning horizon. Each year's number is derived from the tax rules in force for that year. We label every year with one of three confidence tiers to be explicit about how solid the underlying rules are.
IRS published (ACTUAL)
Years where the rule values come directly from IRS revenue procedures, SSA cost-of-living announcements, or HHS Federal Poverty Level publications. These are the values the IRS, SSA, and HHS have officially announced for that year.
Example: the 2026 standard deduction comes from IRS Publication 17 and the relevant Revenue Procedure announcement. We extract the value from PolicyEngine (an open-source tax microsimulation model) which mirrors the IRS source.
CBO forecast (PROJECTED)
Years between the latest IRS-published year and the Congressional Budget Office's 10-year economic horizon. The IRS uprates many tax parameters (bracket thresholds, contribution limits, FPL) automatically each year using a chained-CPI inflation index. CBO publishes annual forecasts of that index in its Budget and Economic Outlook; we apply CBO's forecast to the official IRS uprating formula to estimate future years' values.
CBO's 10-year window typically extends through the next decade. Beyond that horizon, rules switch to the long-term estimate tier (see below). CBO's forecast is a professional macroeconomic estimate, not a guarantee — actual brackets may differ as Congress amends the tax code.
Long-term estimate (EXTRAPOLATED)
Years beyond CBO's 10-year horizon. We hold rules constant at their last CBO-projected values and let the projection run forward. This produces a deterministic baseline for long-horizon planning, but it makes a strong assumption: that no major tax legislation occurs in the intervening decades.
Actual policy will almost certainly differ. Long-term estimates are useful for comparing scenarios (Roth vs. Traditional, claim Social Security at 62 vs. 67, etc.), where the structural relationships matter more than the absolute level. They are not predictions of your actual taxes.
Data sources
IRS / SSA / HHS sources: Annual revenue procedures, SSA cost-of-living announcements, HHS Federal Poverty Level publications. We mirror these via PolicyEngine-US (open-source, MIT-licensed) and apply the same uprating logic for forecast years.
CBO forecast: The Congressional Budget Office's annual Budget and Economic Outlook, which projects chained-CPI inflation for the next decade. PolicyEngine's uprating code applies this forecast to IRS uprating formulas.
Pull cadence: We re-pull rule values weekly from the upstream sources and detect any drift before applying changes. Detected breaking changes trigger admin review before the new values reach the engine.
Limitations
The tax projection is a hypothetical illustration of mathematical principles applied to your inputs and the tax rules of each year. It is not a prediction of your actual taxes, nor is it personalized investment advice.
Projections reflect the rules currently anticipated; they cannot anticipate legislative changes, your individual deductions or credits beyond the standard calculation, state tax-law amendments, or year-by-year discretionary decisions you may make. Consult a tax professional for guidance specific to your situation.