You do not need to be an expert to get a rough idea of your federal tax. The basic calculation has four steps.
1. Add up your income
Include wages, self-employment income, interest, dividends and other taxable income. Your W-2 and 1099 forms show most of these figures.
2. Subtract adjustments and deductions
Certain adjustments reduce your income first. You then subtract either the standard deduction or your itemized deductions, whichever applies to you. What is left is your taxable income. Non-residents follow different rules, and most cannot claim the standard deduction.
3. Apply the tax brackets
US federal rates are progressive, so each band of income is taxed at its own rate. Your top rate only applies to the income in that top band, not to everything you earned. The IRS publishes current brackets every year.
4. Subtract credits and payments
Credits reduce your tax directly. Then subtract tax already paid, such as withholding from your paycheck. A positive result is what you owe, and a negative result is a likely refund.
This gives you an estimate only. State taxes, self-employment tax and special situations can all change the result, so talk to us if you want a precise figure.
General information only, not tax advice for your specific situation.