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How To Do Easy Income Tax Calculations

Income Tax Calculation

The income tax is the predominant form of levy for the Federal Government in the United States. The system affects all individuals who are working and of age to be legally declared as tax payers. As a result of its progressive system, the income tax associated with each individual will vary based on their income or more specifically, their salary.

The Internal Revenue Service, through the policy of the political party in office and the tax rules established by the Federal Government, attach different percentage rates to different income brackets. Those who have higher annual salaries will pay a higher percentage of tax.

To figure out your specific income tax calculation you must first acknowledge the corresponding tax brackets and pinpoint where you fall. The tax brackets are somewhat simple; each bracket has a floor and ceiling based on annual salaries. To find your appropriate tax rate percentage you must simply observe your salary and match it up with the corresponding bracket. Currently, there are 6 brackets (10%, 15%, 25%, 28%, 33%, 35%) in the United States income tax system.

The first step to figuring out your specific income tax calculation is to view your appropriate tax rate. Once this percentage figure has been realized you must then subtract all deductions or write-offs present with your particular tax case. In addition you must also realize the amount withheld by the federal government throughout the course of the fiscal year.

The income tax calculation will be jumbled due to the multiple figures, however, an individual can use an income tax estimator to simplify the process. The income tax estimator will list all necessary components of the income tax calculation and tabulate the figures for you.

NEXT: Income Tax Types

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