There are numerous ways to figure out how much you will owe in federal taxes, but they all calculate the same thing: the percentage of taxes you will pay to the federal government on your income. The goal, according to the IRS, is to have enough taxes withheld from your paychecks so that you owe nothing at the end of the year, and nothing is owed to you.
The easiest way to estimate how much federal tax liability you will have is to find a free online tax calculator. TurboTax, H&R Block, 1040.com and the IRS website all have free calculators available to evaluate federal tax amounts and other tax-related information.
There are several things that can affect the amount of income tax you are required to pay, including income bracket, deductions, and filing status. These can also change in the event that certain factors in your life change, such as marriage or divorce, birth of a child, retirement, purchasing a new home, getting or losing a job, increased or decreased, interest, medical expenses or education-related expenses.
The standard deduction is the fixed dollar amount you receive based on your filing status. There are five filing statuses: single, head of household, married filing jointly, married filing separately, or qualifying widow or widower with a dependent child. Single status signifies that you are not married for the entire year. You can claim children as a tax exemption, or file as a head of household, which usually incurs a lower tax than filing with a single status. When filing as a head of household, you are unmarried, paid more than half the cost of maintaining a home, and cared for a child or relative for more than half the year. Filing jointly with your spouse usually gets a lower tax than filing separately.
Keeping track of and itemizing your expenses may get you a bigger deduction than you would have received otherwise. Although there are more than 50,000 tax deductions available, the most common are casualty and theft losses, charitable contributions, deductible taxes, health savings accounts, interest expenses, medical and dental expenses, mortgage points, employee business expenses and student loan interest.
Using a federal tax estimator will ensure you are not surprised by the amount you owe or the refund you receive after filing your taxes.