How to Figure Out Federal Taxes
If you are looking to calculate your federal income tax, you will be glad to know that the steps involved are extremely easy. By following the right procedure, you can perform this task quicker than expected. Every year you have to determine the federal taxes you must pay as part of your legal responsibilities towards the state. For those who did not pay enough tax, they are likely to suffer a big tax bill before the end of the fiscal year. It is crucial to determine your expected annual income to know how much tax you will have to pay.
Instructions
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If you have not been working full time, you will need to know how much money you have made from part time employment. Typically, part time employees are not required to pay any income taxes as their annual income is below the threshold value. However, if you are a full time employee making more than $32,000 per year, you will be required to pay income tax.
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Consider turning on your computer and wait for Windows to load. Type in your username and password and find your internet browser in the start up menu. Type the Internal Revenue Service website address in the URL section to navigate to the required web page.
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Now, locate the download page on the website. Find the appropriate tax form suitable to your financial situation. Choose from forms 1040 or 1040 A unless your financial and personal status have changed recently. Print the forms if you want to work out the taxes by hand. Alternatively, you can choose to perform the calculation on Microsoft Excel sheet. It is recommended to visit the IRS Tax Topic 352 for detailed information on choosing the right tax forms.
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Now fill the form with the required details. You will be required to fill the form using details such as your full name, permanent address, social security number and bank details. Next, fill the income section on the form to be able to determine your income tax for complete fiscal year. If the financial year is not yet complete, you can enter your estimated income to calculate the taxes.
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It is vital to complete the section called the Adjusted Gross Income as this will allow you to subtract expenses from your annual income if needed. Subtract your standard deduction from your gross income to find the taxes you will be required to pay.
