Tax Estimator—figure out your taxes for the upcoming tax season. You can estimate tax liability, taxes withheld, and tax refund. The tax estimator will give you a head start to your taxes so you can adjust taxes paid or withheld to get the most out of your federal income tax return.
Before using the tax estimator, know how taxes are calculated. In this article, we will explain the math that goes into taxes and provide you an estimator to take a look at your taxes.
Tax liability refers to the amount owed by a taxpayer whether it be an individual, corporation, or any other entity that pays tax. Your tax liability is pretty much the tax you owe to the Internal Revenue Service.
The method for calculating tax liability is simple. Your adjusted gross income, also known as taxable income determines the rate you will be taxed. You pay a certain percentage of income up to the highest tax bracket’s tax rate.
The taxes withheld is what your employer takes out of your paycheck every pay period to pay your federal income taxes. The amount withheld is forwarded to the Internal Revenue Service and you can see it on your pay stub. You will also see the total taxes withheld up until that pay period.
Since the taxes withheld is how you pay federal income taxes, it’s going to have a direct impact on your tax refund.
Tax Refund Estimator
These two bring us to the tax refund. Because of the way we pay our income taxes, it may come out as that we paid more taxes a little bit excessively. In other words, the taxes paid is more than the tax liability. If this sounds like the outcome, the IRS will issue you a tax refund.
How you’re going to figure out tax refund is simple. Deduct the taxes withheld from the tax liability and you will get to your tax refund if the result is below $0.
Start estimating taxes
Use the above estimator to figure out the taxes withheld from your income as well as your tax liability, and tax refund. When using the estimator, you will only need to enter a couple of things. To get the most accurate results, make sure to enter your anticipated deductions and credits so that the adjusted gross income and tax liability is calculated right.