Tax Federal Calculator And Short Guide About Filing From Joe Mastriano, CPA
Tax Federal Calculator – Links To Free Calculators And Explanations Of Common Issues
How much in income taxes will you pay? You can search the web for words like tax federal calculator, or tax calculator to find easy online methods to estimate tax you owe (see our recommendation below). Remember, tax federal calculators are just for estimation purposes, and should not be used for any other purposes than estimation.
The following links will take you to several free tax federal calculators to help you estimate your tax liability for various personal and business taxes: http://www.dinkytown.net/taxes.html
Remember to come back so we can help prepare delinquent tax and negotiate any IRS issues, to help you reduce taxes or to establish payment arrangements that will not be overturned by the IRS once they are established.
Following, a list of items to take into consideration when estimating taxes on a tax federal calculator…
Choosing Filing Status
Choose your filing status. Your filing status determines the income levels for your federal tax bracket. It is also important for calculating your standard deduction, personal exemptions, and deduction phase out incomes. The table below summarizes the five possible filing status choices. It is important to understand that your marital status as of the last day of the year determines your filing status.
Filing status examples:
- Married, Filing Jointly – If you are married, you are able to file a joint return with your spouse. If your spouse died during the tax year, you are still able to file a joint return for that year. You may also choose to file separately under the status “Married filing separately”.
- Married, Filing Separately – If you are married, you have the choice to file separate returns.
- Qualified Widow(er)- Generally, you qualify for this status if your spouse died during the previous tax year (not the current tax year) and you and your spouse filed a joint tax return in the year immediately prior to their death. You are also required to have at least one dependent child or step child whom which you are the primary provider.
- Single – If you are divorced, legally separated or unmarried as of the last day of the year you should use this status.
- Head of Household – This is the status for unmarried individuals that pay for more than half of the cost to keep up a home. This home needs to be the main home for the income tax filer and at least one qualifying relative. You can also choose this status if you are married, but didn’t live with your spouse at anytime during the last six months of the year. You also need to provide more than half of the cost to keep up your home and have at least one dependent child living with you.
About Dependents
A dependent is someone you support and for whom you can claim a dependency exemption. The credit is phased out for at higher incomes.
Capital Gain or Loss
This is the total capital gain you realized from the sale of assets. For more information on capital gains tax rates and how they are applied, you may wish to read IRS Publication 17: Your Federal Income Taxes.
Estate Tax Planning & Calculation
Knowing your potential estate tax liability is a great place to start your estate tax plan.
In 2001, new rules were passed that reduced estate taxes over the next few years and completely eliminated them in 2010. Unfortunately, the reform is not yet permanent. The estate tax rate table remained the same for the entire period, however the maximum tax rate was gradually reduced from 60% to 45%. Make sure the federal calculator you are using for estimating your taxes is up to date with the changes in legislation.
Transfer to Spouse
Married couples never have to pay estate taxes on assets transferred to a surviving spouse. In addition, any assets transferred to a surviving spouse don’t count against the estate tax exemption. Some tax federal calculator applications for tax allow married couples to indicate how much of their estate will be transferred directly to a spouse. This can be a way to reduce your current estate tax liability, although it may mean a larger estate tax bill in the future.
Used Gift Exemption
Large gifts distributed during your lifetime can reduce your estate tax exemption when you die. This can increase your estate tax bill on a federal calculator. The tax code was designed this way to prevent wealthy individuals from giving away their entire estate before they die, thus escaping estate taxes. If you have never given a gift over $10,000, other than gifts to non-profit organizations or your spouse, then a tax federal calculator should set your used gift exemption amount as $0.
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