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How to calculate federal income tax rates

There are many ways to calculate federal income tax rates. However, the simplest of ways of course is with the tax table supplied by the Internal Revenue Service. This table will show your tax rate for the year you are filing for after adjustments and deductions have been made. If you prefer, you can get an estimate by using a free tax calculator on the web.

Calculating your income tax revenue and deductions

Although there are many free tax calculators available on the web, the traditional way to get the exact IRS tax owed is by filing out a 1040. The 1040 instructions are pretty simple to follow, except if you are filling out for small business and professional models. These income taxes need a professional to guide you and make sure you are getting the most deductions possible. A professional CPA or attorney will not only help you get the most deductions, they will also give you warnings about which deductions may cause or trigger an audit. Deductions and subtractions As you begin filling out your 1040, you will have to give the basic information such as name, address, social and how many dependents you have. You will also have to fill out your filing status. Your federal tax rate chart is based not only on your adjusted income, but on your filing status. There are four different filing statuses: Single
Married, filing jointly
Married, filing separately
Head of household Your tax rates are based on adjusted income also. So, for a single taxpayer who makes less than $8500, his tax rate is 10%. As he makes more money which the majority of citizens do, then the rate goes up. These figures can change yearly. So, what is correct today is not necessarily what is correct next year or the year thereafter. The deductions which will adjust your income are things like: IRA contributions
Adjustments from schedule C
dependent deductions

Final calculations using a tax chart

Once you have filled out all your schedules and have taken every allowable deduction, you are ready to do final checking. If you are using a tax software company, then you will be checked by their computers for possible errors. You then will go to the tax tables and look at your adjusted income compared to your filing status, such as single, married or head of household. This figure is then inputted on your 1040 form. You then will either owe or be entitled to a refund. If you owe money, then you must submit a check with your social security number attached to the check. If you are due a refund, then you may request a refund or ask for a tax loan.

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