An Easy Way to Determine Your Income Tax

It can be useful to calculate your income tax return quickly without doing a full tax return. You may want to determine what your tax return is going to be so you know when to file your tax return. Somtimes you are going to get a big tax return so you want to get it as soon as you possibly can. If you are going to owe the IRS money, you probably want to wait until the last minute or even request an extension. Below you will find eay to follow instructions on how to calculate your tax return. When you are ready to do your taxes, you can save a lot of money by using income tax return software software and get the same results as with an expensive tax professinal.

Start you tax estimate by figuring how much money you paid in taxes and how much money you made overall during the last year. Your W2 statements or pay stub will have all this information. If you are looking at your pay stub you need to use the net amount because you don’t have to pay taxes on certain things. Make sure you write down the total tax you paid and the total amount that you made.

Now, you have to determine how many deductions you have. This includes charitable contributions, (like to your church), mortgage interest, your deductions per person in your household, and anything else that is tax deductible. Just add all these numbers up. This doesn’t have to be exact because we are just figuring out an estimated tax return.

Now that you have your income and deductions, I will show you exactly how to calculate income tax. All you do is subtract your deductions from your income and look up how much tax you owe for that amount. To find your tax, just go to the IRS website and find the tax table or check out my 2009 Tax Estimator page. On the table, you will see how much tax you owe based on your filing status and income. Compare that to the amount of tax that was taken out of your paycheck and you have your return amount or how much you owe.

There are some special modifiers for income tax that you may need to take into consideration. If you have children, for example, you get a tax credit of around $1000 each which lowers your tax. There are also penalties for things like early withdrawals from an IRA.