Pub 17 Study Notes, Chapter 13: How To Figure Your Tax (Tax Years 2023 to 2026)

Chapter 13 of IRS Publication 17 is the bridge from taxable income to your refund or balance due. It outlines the steps, flags the alternative minimum tax and says when the IRS will figure the tax for you. In the 2025 edition it covers printed pages 106 to 108; the 2023 and 2024 editions have it one page later. The Tax Table (pages 111 to 122), Tax Computation Worksheet (123 to 124) and Tax Rate Schedules (125) follow chapter 14 in the 2025 edition. It touches Form 1040 lines 15 to 37, Schedules 2 and 3, and Forms 6251, 8615, 8814 and 2555. These are unofficial study notes in our own words; the IRS publication controls. Neighbours: chapter 12 and chapter 14.

Key terms

From taxable income to refund or balance due

1. Figure the income tax (Form 1040, line 16), plus any AMT.
2. Subtract nonrefundable credits (child and dependent care, education, foreign tax, saver's and others). They cannot cut tax below zero.
3. Add other taxes: self-employment tax, Additional Medicare Tax, net investment income tax, household employment tax, extra tax on retirement accounts and more.
4. Subtract payments: withholding, estimated tax, tax paid with an extension, and refundable credits. Pub 17 treats the earned income credit, additional child tax credit, American opportunity credit (its refundable part) and net premium tax credit as payments.
5. Compare payments with total tax: more paid means a refund, less means a balance due.

Choosing the method

Using the Tax Table

1. Take taxable income from line 15.
2. Find the row where it is at least the left number and less than the right number. Rows are $25 wide from $25 up to $3,000 (the first three rows, under $25, are narrower) and $50 wide from $3,000 to $100,000.
3. Read across to your filing status column. Qualifying surviving spouses use the joint column.
4. Enter the figure in the line 16 entry space.

Pub 17 prints a sample each year for a joint return with taxable income of $25,300. In the sample rows we checked, the printed figure equals the schedule tax at the middle of the row, rounded to the dollar.

Using the Tax Computation Worksheet

Pick the section for your filing status (A single, B joint or qualifying surviving spouse, C married filing separately, D head of household). Find the row for your income, then follow columns (a) to (d): enter line 15, multiply by the rate, and subtract the fixed amount. The result goes on line 16. The same worksheet figures tax on amounts carried from the capital gain, Schedule J, Form 8615 and foreign earned income worksheets.

2025 subtraction amounts (printed, pages 123 and 124):

For 2023 single, separate and head of household filers the worksheet starts at the 24% row, because the 22% bracket ended below $100,000.

Using the Tax Rate Schedules

Schedules X (single), Y-1 (joint or qualifying surviving spouse), Y-2 (separate) and Z (head of household) give a base amount plus a rate on income above a bracket start. Pub 17 says they show your rate at each level and are not for figuring the tax. See our tax brackets guide for plain-English examples.

Capital gains, dividends and AMT

Net capital gain and qualified dividends are taxed at 0%, 15% or 20%, based on taxable income. Unrecaptured section 1250 gain tops out at 25%, and collectibles and some small business stock gain at 28% (Pub 550 (2025)). The worksheet fills the 0% zone first with whatever room ordinary income leaves, then 15%, then 20%. The 3.8% net investment income tax (Form 8960) starts, for 2025, at $250,000 of MAGI for joint filers and qualifying surviving spouses, $125,000 separate and $200,000 for single and head of household; the statute fixes these amounts rather than indexing them. See our capital gains guide.

AMT may apply when taxable income combined with adjustments and preference items is more than a set amount (Form 6251); the 2025 edition adds the new senior deduction to the adjustments. See our AMT guide.

When the IRS figures your tax

File by the due date (extensions do not count) and the IRS can figure the tax, the credit for the elderly or disabled and the earned income credit. It will not if you want direct deposit or a refund applied to next year's estimated tax, have income beyond wages, interest, dividends and similar items, have taxable income of $100,000 or more, itemize, or file any of 13 listed forms (such as 6251, 8606, 8615, 8814, 2555 and 8889). Pay any bill within 30 days or by the due date, whichever is later.

By tax year: 2023, 2024, 2025 and 2026

Single: taxable income up to

Married filing jointly and qualifying surviving spouse

Head of household

Income above the 35% ceiling is taxed at 37%. Married filing separately matches single through the 32% ceiling; its 35% ceiling is $346,875 (2023), $365,600 (2024), $375,800 (2025) and $384,350 (2026 planning).

Capital gain and qualified dividend thresholds (0% up to / 15% up to)

AMT

2026 column: planning figures from Rev. Proc. 2025-32 and the 2025 law; Pub 17 (2026) is not yet published.

Rule and text changes by year:

• The seven rates held in all four years; the 2025 law made them permanent from 2026.
• The 2023 edition let a refund buy savings bonds (gone from 2024), and the 2023 and 2024 editions list Form 5405 (gone from 2025).
• 2023 cites Pub 524 for the elderly or disabled credit; 2024 and later cite Schedule R.
• 2025 adds the new senior deduction to AMT adjustments, shows the earned income credit on line 27a, and adds line 13b for Schedule 1-A.

Worked examples

Example 1 (Tax Table, joint return, taxable income $25,300). The printed figure is $2,599 for 2023, $2,575 for 2024 and $2,562 for 2025. Check for 2025: 10% of $23,850 is $2,385, plus 12% of ($25,325 - $23,850) = $177, giving $2,562. For 2026 (planning): $2,480 + 12% x ($25,325 - $24,800) = $2,543 from the rate schedule, since no 2026 table exists yet.

Example 2 (tax year 2025, worksheet). A joint return has taxable income of $150,000. Section B, 22% row: $150,000 x 0.22 = $33,000, minus $10,172 = $22,828. Schedule Y-1 agrees: $11,157 + 22% x ($150,000 - $96,950) = $11,157 + $11,671 = $22,828.

Example 3 (tax year 2025, qualified dividends). Taxable income is $58,000 for a single filer, including $12,000 of qualified dividends. Ordinary income is $46,000; the Tax Table gives $5,285. The 0% zone ends at $48,350, so $2,350 of dividends is untaxed and $9,650 is taxed at 15%: $1,447.50. Total: $5,285 + $1,447.50 = $6,732.50, below the $7,680 table tax on all $58,000, so the smaller figure is used.

Common mistakes and exam traps

• Using the Tax Rate Schedules to compute the return instead of the Tax Table or worksheet.
• Reading the wrong column; the qualifying surviving spouse uses the joint column.
• Using the Tax Table at exactly $100,000 (the table stops below it).
• Applying a bracket rate to all income instead of only the slice inside the bracket.
• Forgetting that qualified dividends and capital gains need their own worksheet.
• Assuming the IRS will figure tax for an itemizer.

Forms and lines map

The 2026 draft Form 1040 adds line 12f, swaps lines 13a and 13b, and adds lines 24b, 24c, 32b and 32c.

Check yourself

Which method applies to taxable income of exactly $100,000? (2025)

Answer: The Tax Computation Worksheet; the Tax Table ends below $100,000.

Which Tax Table column does a qualifying surviving spouse use? (2025)

Answer: Married filing jointly.

What is the top of the 12% bracket for a single filer? (2025)

Answer: $48,475.

What is the top of the 10% bracket for joint filers? (2026 planning)

Answer: $24,800.

What is the 0% capital gain ceiling for head of household? (2024)

Answer: $63,000.

Joint return, taxable income $120,000. Tax by worksheet? (2025)

Answer: $26,400 - $10,172 = $16,228.

Name two things that stop the IRS from figuring your tax. (2025)

Answer: Taxable income of $100,000 or more, and itemizing (also direct deposit, Form 6251 and others).

Which credits does Pub 17 treat as payments? (2024)

Answer: Examples are the earned income credit, additional child tax credit, American opportunity credit (refundable part) and net premium tax credit. The Pub 17 list also has the fuels credit and the credit for tax on undistributed capital gain.

Frequently asked questions

General information only, not tax, legal or accounting advice for your situation. Rules, limits and deadlines change; confirm the current rules with the official source or a qualified professional before you act. Reading this page does not create a professional relationship with CPA Tax Payroll and Accounting Corp.