How to Calculate Federal Income Tax
Using a free online tax calculator is the easiest way to calculate Federal income taxes. Performing the calculation will determine if a person will receive a refund or will have to write a check to the Internal Revenue Service. A person who has a complex tax return may want to hire an accountant to perform the calculations.
- Find your W2 form from your employer and your other financial records so you can start to work on your income tax calculation. Go online and look for a free income tax calculator. Read the instructions on the website to learn how to properly use the calculator.
- Look for the income section on the calculator. Fill in your income and move on to the next section on the calculator. Depending on the calculator, that may be “Exemptions.” Fill in the number for each person you are responsible for including yourself, your spouse and children.
- Determine the adjustments to your return such as a retirement account contribution or moving expenses. Complete the “Deductions” section based on whether you itemize or take the standard deduction. Once you complete the section you should see your “Adjusted Gross Income” dollar amount.
- Complete the section on “Tax Payments.” Include the Federal taxes your employer withheld, which you can find on your W2 form. Once you finish typing in the information you should see your Federal income tax amount. If you owe, make sure that you send a check with your tax returns when you file.
- Hire an accountant if you have a complicated financial situation such as owning a business. Give the accountant all of your financial information and find out how long it will take to calculate your income tax. Do not wait until it is close to tax filing time or the accountant may not be able to get back to you for a few days.