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Tax Planning Fundamentals
The first book to read on tax. It explains how the federal brackets really apply to your income, how filing status and the type of income change what you owe, which deductions and credits matter, how side income and quarterly payments work, and how state tax fits on top.
Chapters7
Reading time40 min
Worked examples20
Updated2026-10-01
What you will be able to do
- Work out your marginal and effective tax rates and use the marginal rate to judge a raise, a deduction or extra income.
- Choose the filing status that fits your situation and recognize when marriage changes your tax.
- Tell which of your income is taxed as ordinary income, at the lower capital gains rates or not at all.
- Decide between the standard deduction and itemizing, and check which credits and new deductions you may qualify for.
- Set aside tax on side income and avoid the underpayment penalty with the safe harbor rules or withholding.
Contents
7 CHAPTERS · ABOUT 40 MIN- 01How Tax Brackets Really Work Why a raise never leaves you worse off under the federal income tax, how the 2026 brackets apply in layers, the difference between your marginal and effective rate, and what a deduction is really worth.6 min5 computed
- 02Choosing the Right Filing Status The five filing statuses and who qualifies, how each changes your brackets and standard deduction, when marriage is a tax bonus or penalty, and when filing separately is worth checking.6 min6 computed
- 03How Each Type of Income Is Taxed Ordinary income, long-term gains and qualified dividends, tax-free income and the surtaxes at higher incomes: the rate each type faces in 2026 and how to hold investments with that in mind.6 min2 computed
- 04Deductions, Credits and a Yearly Tax Check-Up The path from income to tax, the adjustments anyone can use, standard deduction versus itemizing under the 2026 limits, the new deductions for 2025 to 2028, why credits beat deductions, and a six-step yearly check-up.6 min2 computed
- 05Taxes on Side Income and Multiple Income Streams How income from several sources stacks at your top rate, what self-employment tax adds, the deductions and retirement accounts that belong to a side business, and when an S corporation election can pay off.5 min2 computed
- 06Withholding and Quarterly Estimated Taxes Who must pay tax during the year, the 2026 due dates, the 90%, 100% and 110% safe harbors that prevent the underpayment penalty, using withholding instead, and a simple quarterly routine.5 min2 computed
- 07State and Federal Taxes: How the Two Layers Fit How state income taxes are built, how they interact with your federal return and the state and local tax deduction, the residency rules that decide which state can tax you, and why total tax burden matters more than the rate.5 min1 computed
CALCULATORS USED IN THIS BOOK