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Methodology

Tax year 2026 · Last rewritten 2026-08-17 · Educational estimate, not advice

Offer Reality Check answers one question: after federal income tax and employee FICA, how does take-home line up with a public rent benchmark in the destination metro? Everything else on the site — the estimator, compare, and city examples — is that same path with different inputs.

What we compute

The engine is deterministic. The same gross, filing status, state, and rent produce the same net. Browser JavaScript mirrors the Python model for supported states. If the two disagree, Python is authoritative and we treat that as a bug.

  1. Start with annual gross wages.
  2. Subtract employee pre-tax deferrals you typed (401(k) and similar). We do not invent a default deferral.
  3. Subtract the standard deduction for the filing status. We do not itemize.
  4. Apply 2026 ordinary federal brackets. No credits, no AMT, no NIIT.
  5. Add employee Social Security (6.2% up to the SSA wage base), Medicare (1.45%), and Additional Medicare (0.9% above the filing-status threshold).
  6. If the state has no broad wage income tax in our v0 set, state income tax is zero. Otherwise we refuse a full grade.
  7. Divide remaining take-home by twelve and compare it to HUD Fair Market Rent for the chosen bedroom count.

Tax year and sources

Current parameters are tax year 2026: IRS Rev. Proc. 2025-32 for brackets and the standard deduction; SSA published wage base for 2026. When IRS or SSA publishes the next year’s figures, we update the engine, re-run the examples, and change the date on this page.

Housing defaults come from HUD’s Fair Market Rent county/metro Excel (FY index), not from listing sites. FMR is a program benchmark used for housing assistance. It is usually below asking rent in tight neighborhoods and can sit above a far-suburb quote. The estimator lets you override with a real listing.

Worked example (Houston, $120,000, single, 2BR)

This is the same path as the Houston $120k example. Numbers below are the method, not a promise that your W-2 will match.

  • Gross: $120,000. No pre-tax deferral typed.
  • Taxable income after the 2026 single standard deduction, then ordinary federal tax.
  • FICA: Social Security up to the wage base, plus Medicare. Additional Medicare does not apply at this gross for single filers.
  • Texas has no state wage tax in v0, so state income tax is $0.
  • Monthly take-home is compared to Houston-area HUD 2BR FMR. The ratio is rent ÷ monthly net.

We treat a ratio near 30% as a planning shorthand, not a rule. A 28% ratio with a 90-minute commute can be worse than a 34% ratio next to the office. The page reports the ratio so you can argue with it; it does not accept or reject the offer for you.

States we will grade vs states we will not

v0 full model: AK, FL, NV, SD, TN, TX, WA, WY — no broad wage income tax. The estimator and compare tool refuse other states. We do not pretend California or New York is 0% tax.

Older “ceiling” pages for other states show federal+FICA only. They are marked incomplete, kept off the sitemap, and are not an offer grade. Until we model that state’s tax, they stay unpublished from the public index.

What we refuse to invent

  • Local income taxes, school district taxes, and city wage taxes.
  • Credits (child, education, energy), AMT, and itemized deductions.
  • Employer benefits, equity, bonus “expected value,” or signing-bonus tax timing.
  • Zillow or Apartments.com asking rent as if it were official.
  • A pass/fail score that pretends household size, partners, or debt do not exist.

If a number is not in IRS, SSA, or HUD publications we ingested, it does not appear as a modeled line. Override fields exist so you can put your listing and your 401(k) in; we will not guess them.

Quality control

Before a tax-year bump ships, we re-check a small set of hand-calculated cases (single and MFJ, below and above the Social Security wage base, with and without Additional Medicare). City examples are regenerated from the same engine — they are not separately typed spreadsheets.

If you find a case where the estimator and an article disagree, or where a published IRS/SSA figure is stale, email hello@offerrealitycheck.com with the inputs. We correct the engine first, then the pages.

How to use this without fooling yourself

Run the estimator with your real listing, not only HUD. If you are comparing two cities, use Compare so both sides share the same tax year and filing status. Lock the assumptions in a Decision Brief before you forward a screenshot. Read the Disclaimer — this is a planning sketch, not a CPA return.