To help people figure their income taxes, the Internal Revenue Service publishes tax or tax tables each year in their tax return instructions and IRS Publication 17.
How he calculates the percentage of federal taxes to pay – Taxes
Understanding how to use the tables will make it easier for you to calculate the tax you owe or provide you with an estimate of your future tax bills should you need to budget for them.
Step 1: Determine your marital status
The IRS allows you to choose any filing status for which you are eligible. This is important as the amount of your standard deduction will vary depending on the filing status you choose. In 2017, for example, individual filers can claim a standard deduction of $ 6,350; however, if you also qualify to file as head of household, your deduction increases to $ 9,350.
Step 2: Calculate Your Taxable Income
Your taxable income is generally equal to your gross income minus the standard deduction for your filing status or the total of your itemized deductions. Reduce your income by the amounts of other deductions that you are eligible to claim plus any exemptions you may take for yourself and your dependents to reach your taxable income.
Online calculators like our own calculator TaxCaster they can help with this. Also, when you use TurboTax to prepare your taxes, we will calculate your taxable income for you.
Step 3: Determine Your Income Category
Locate the tax table in the most recent version of IRS Publication 17. Find the income category that contains your taxable income in the left column of the table. For example, if you have $ 33,460, you would use the income category that ranges from $ 33,450 to $ 33,500.
Step 4: Identify Your Tax Return Status
Find your tax return status in the top row of the table. Each marital status has a different column, so be sure to use the one that corresponds to your marital status or you will receive the wrong amount of tax due.
Step 5: Find the amount of tax you owe
Find where the row for your income and the column for your marital status intersect. This is the amount of tax you owe. For this example, if you are single, you would find where the single column and the row from $ 34,450 to $ 34,500 intersect.
Let TurboTax do the work
The steps above are for calculating your taxes by hand. If you use TurboTax, we will simply ask you simple questions about things like your income, your home and family situation and do all the calculations for you. You don’t need to know anything about tax brackets or tax tables – we’ll determine the best state for you to get the largest tax refund you deserve.