2009 Tax Estimator

There are many reasons you may want to know how to calculate your income tax without doing a full tax return. One reason to do a quick calculation of your tax is to determine when you should do your actual tax return. If you are going to get a big tax return, you probably want to do your taxes as soon as possible. If it turns out that you are going to have to pay in taxes you will probably want to wait as long as possible to file your return.

If you are trying to figure out how to calculate income tax easily read on. When you are ready to do your taxes, you can save a lot of money by using online tax preparation 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. You need to look at the "net" number because you don't have to pay taxes on certain things like 401K contributions. 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.

With your income, deductions, and taxes paid, you are ready to estimate your income tax. This is really simple - you just subtract your total deductions form your taxible income to determine your taxable income then look up your tax. You can go to the IRS site and look up the tax table. 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.