Whether you decide to file your taxes online or manually or with the help of a professional, once you’ve filed them after providing all the relevant information about your income, you’ll be able to find out if you owe money or if you’re owed a tax refund.
Normally, your tax return liability is calculated by deducting the money withheld for federal income tax by your employer from the total federal income tax for the year. Don’t forget that the taxes that have been withheld from your paycheck aren’t always paid to federal income tax. Some amount is paid into Social Security, Health care, state income tax (depending on where you live).
Estimating You Tax Return Manually:
You shall follow the steps given below to manually estimate your tax return:
Step 1: Calculate Your Taxable Income:
In order to estimate your tax return, you first need to estimate your taxable income. To estimate your taxable income, you simply take your gross income and subtract any tax deductions. The remaining amount will be your taxable income.
Step 2: Apply Appropriate Tax Rate
To calculate your tax liability, apply the tax rate assigned to your appropriate tax bracket (based on your income and filing status) on your taxable income.
Step 3: Calculate Tax Payable or Receivable
Previous year’s tax credits and any amount for taxes that employers may have deducted from your paycheck might cover the tax liability for the period. If not, you will have to pay the rest of the tax liability. If you’ve paid more than you’re supposed to, you get a tax refund.
Estimating Your Tax Return Electronically:
Nowadays, there are many online tax software companies through which you can find out your tax returns after submitting any necessary documents. Make sure you have the required documents before making any submissions or doing any calculations.