Simple Way to Calculate Federal Income Tax for Financial Health
Financial health isn’t something I talk about a lot on this blog, but it is very much related to physical health and I want to talk about it for a minute. Now that we are beginning the new year, and new decade this time around, we have to start thinking about our finances a bit. With that said, we still have to pay our taxes for last year - and that scares a lot of people. I want to try and eliminate some of your worries.
I know the tax form can be very intimidating, but when you really get down to how to calculate tax, it isn’t all that difficult or scary. One way to take some of the mystery and fear out of taxes is to estimate your taxes and tax refund before you even start doing them or going to your accountant.
The first step to calculate income tax is to figure out how much money you made. You should have statements from your employer and any investments or interest you earned. After that, determine how many deductions you have like mortgage interest and charitable contributions. Determine your taxable income by subtracting your deductions from your total income. From there you look up your tax on a tax table. After you know the tax you owe, subtract credits like the credit for children and add in any penalties to get your final number. With any luck, you will have paid in more than you owe and the government will be sending you a big fat refund check.
Now that wasn’t so hard was it. Try not to get stressed about your finances becase that will hurt your physical health. When you are ready to do your taxes, check out some of the online income tax software programs. They are way cheaper than going to a tax professional.
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