Income Tax Calculator: Estimate Your Refund in Seconds for Free

by Sarah York, EASarah York Sarah is a staff writer at Keeper Tax and has her enroll Agent license with the IRS. She has closely a decade of populace report experience, and has worked with clients in a wide range of industries, including anoint and natural gas, manufacture, real estate, wholesale and retail, finance, and ecommerce. Sarah has across-the-board experience offering strategic tax plan at the state of matter and federal level. During her time in industry, she handled tax returns for C Corps, S corps, partnerships, nonprofits, and exclusive proprietorships. Sarah is a extremity of the National Association of Enrolled Agents ( NAEA ) and maintains her continuing education requirements by completing over 30 hours of tax train every year. In her spare part time, she is a give guy ma and enjoys hike, broil, and overwatering her houseplants. It can be nerve-racking to get a treat on your income tax situation. Congratulations on taking the first step !

now that you ’ re here, let ’ s take some clock time to understand the taxes you owe, what steps are available to minimize your bill, and how to stay on crown of your taxes going forth .

How does this income tax calculator work? 

fair enter some basic information about yourself, and our income tax calculator will estimate how a lot tax you ‘ll owe, or — if you see a negative total — how boastful your refund might be.
It ’ mho arrant for the roughly 10 million Americans who deal with the uncertainty of having self-employment income and want to know how it will affect their taxes. If you do have a W-2 job — with or without a side gig — our calculator will even estimate your withholding tax. That room, you won ’ thyroxine have to whip out your tax forms to get an answer .

Notable factors included in our calculations

This calculator only considers your W-2 and self-employment income. It doesn ’ triiodothyronine agent in income from other sources, like investments, rental income, or retirement income.
note that the calculator :

  • Assumes moderate state and federal withholding on your W-2 income
  • Includes a projected Qualified Business Income Deduction on your self-employed earnings
  • Doesn’t account for tax deductions or credits 

What taxes do you pay when you file your return?

A total of different taxes are calculated on your annual return, but for most Americans, only two are relevant : income tax and self-employment tax. ( The latter applies to any money you earn from freelance, a side bunco, or a little business. ) here ’ s what you need to know about them both .

Income taxes

federal income tax is the most common type of tax, and it applies to all “ earned income. ” ( That means any income you received in exchange for performing a job. )

You may have heard the US tax system described as “ progressive ” or “ graduated. ” here ’ s what that means.
How the progressive tax system works The easiest room to understand the progressive tax system is to think of income in terms of buckets. The first bucket of income is taxed at 10 %, the second at 12 %, the third at 22 %, and so on. For example, let ’ s say you have arrant wages of $ 50,000. The first $ 10,275 is taxed at 10 %, the future $ 31,500 is taxed at 12 %, and the remainder of your wage ( $ 8,225 ) is taxed at 22 %. so your entire tax liability would be broken down like this :
A breakdown of how much tax someone making $50,000 would owe, showing three tax rates ‍ These buckets are called “ tax brackets. ” The mind is to treat everyone evenly while even requiring higher taxes from higher earners. For example, the inaugural $ 10,275 that Jeff Bezos makes is taxed at 10 %, just like everyone else. The only collocate of his income that is taxed at the highest rate ( 37 % ) is the income in surfeit of half a million dollars. You may have heard the terms “ borderline ” and “ effective ” tax rates thrown about. Your bare tax rate merely refers to the highest tax bracket your income is exposed to. so using the exemplar above, where you made $ 50,000, your borderline tax rate would be 22 %. But as we ’ ve learned, the majority of your income international relations and security network ’ metric ton taxed at 22 %. So the effective tax rate is used to describe the average rate that you actually pay. Using the model above, your effective tax rate would be 14 %. That ’ s the average of 10, 12, and 22 : 10 + 12 + 22 ) / 3 = 14.

The income tax brackets for 2021-2022, by filing status ‍ now that you have the basics, there ’ s one other complicating component : file statuses. The tax brackets are determined according to your filing status : individual, marital filing jointly ( MFJ ), married filing individually ( MFS ), and head of family ( HoH ). See the table below :

Tax Rate Single MFJ MFS HoH
10% $0 to $10,275 $0 to $20,550 $0 to $10,275 $0 to $14,650
12% $10,276 to $41,775 $20,551 to $83,550 $10,276 to $41,775 $14,651 to $55,900
22% $41,776 to $89,075 $83,551 to $178,150 $41,776 to $89,075 $55,901 to $89,050
24% $89,076 to $170,050 $178,151 to $340,100 $89,076 to $170,050 $89,051 to $170,050
32% $170,051 to $215,950 $340,101 to $431,900 $170,051 to $215,950 $170,051 to $215,950
35% $215,951 to $539,900 $431,901 to $647,850 $215,951 to $323,925 $215,951 to $539,900
37% $539,901 or more $647,851 or more $323,926 or more $539,901 or more

Self-employment taxes

Self-employment taxes are a combination of Social Security and Medicare taxes ( much referred to as FICA ).
For W-2 employees, these are mechanically calculated and withheld from their paychecks and reported on their W-2. consequently, they rarely have to deal with these taxes when they file their annual 1040 — they ’ ve already been squared up during the year. freelance folks, on the early hand, don ’ triiodothyronine have it so easy. They have to calculate and remit their Social Security and Medicare taxes when they file, to the tune of 15.3 %. To learn more approximately why this rate is thus high, check out our guide to self-employment taxes.

How do you lower your tax bill? 

Step #1: Claim your business write-offs

If you have freelance income or a side bunco, business write-offs are the lone way to directly lower your self-employment taxes. The simple definition of a write-off is any work-related cost that ’ s average in your industry and necessary for completing the job. Oftentimes, people hesitate to claim occupation write-offs because they picture ceremonious things like computers, software, and office supplies that might not apply to them. But what ’ s traditional in one industry might not be traditional in another. A pet groomer, for example, probably doesn ’ thyroxine need a postage scale, but they do need shears, pet shampoo, and treats. similarly, a freelance photographer probably doesn ’ t need a fax machine, but they might need ring lights, props, and multiple camera lenses. Don ’ thymine miss out on write-offs because you ’ ve boxed yourself in. You know what you need to get the job done, so write-off those costs ! And if you need some divine guidance, check out our freelance tax deductions tool that lists coarse write-offs for more than 25 different jobs, from real number estate of the realm agents to bloggers .

Step #2: Don’t miss out on your income adjustments

income adjustments happen before anything else is calculated on your return, and they allow you to reduce the income subject to tax. The most park income adjustments include :

  • Educator expenses (up to $250)
  • Retirement contributions
  • HSA contributions
  • Self-employed health insurance
  • Student loan interest
  • Alimony
  • The deductible part of self-employment tax

Step #3: Take the highest deduction available

Every taxpayer has two options hera : the standard deduction or the itemize subtraction. Whichever option you claim, your deduction is included on top of your business write-offs.
Standard deduction ‍ The goal of the standard tax write-off is to shield a base sum of income from taxation. It ’ s supposed to be routinely adjusted for monetary value of living, but I ’ ll leave it to the reviewer to decide if the IRS is anywhere close to the mark.

The standard deduction is granted automatically based on your filing condition :

Filing Status Standard Deduction
Single; Married Filing Separately $12,950
Married Filing Jointly $25,900
Head of Household $19,400

Step #4: Take advantage of your tax credits

Credits lower your tax charge dollar for dollar. If you ’ re eligible to claim one, savor it in all its money-saving good. There are two types of credits : refundable and non-refundable.

Refundable credits These are by far the best type. Refundable tax credits can be paid out to you as a refund even if you withheld nothing during the class.

For exercise, if you have a $ 1,000 credit rating, and your tax placard is only $ 200, the remaining $ 800 gets issued in the kind of a refund.
Examples of coarse refundable credits include :

  • 💰  Earned Income Credit: Ranging from $1,502-6,728, this credit is available to taxpayers with earned income and whose total income doesn’t exceed certain limits. 
  • 🍼  Child Tax Credit: Expanded with the American Rescue Plan (ARP), the CTC ranges from $3,000-3,600 and is available for taxpayers with children under age 17. For 2022, these rates may return to the pre-ARP amounts: $2,000 per child under the age of 16. 
  • 🎒  American Opportunity Credit: Students are eligible to claim $2,500 annually during the first four years of post-secondary school. However, only 40% of the credit is eligible for refund, with a max allowable refund of $1,000. 
  • 🏥  Premium Tax Credit: This credit is available to low-income taxpayers who purchase their health insurance through the Marketplace, and is usually distributed throughout the year to offset the cost of health insurance. 
  • 👶  Child and Dependent Care Credit (2021 only): Expanded under the American Rescue Plan, this credit is refundable for 2021 only. It accounts for child-care expenses while the parent is working or looking for work. The max credit is $4,000 per qualifying child.

Nonrefundable Tax Credits ‍ While you can ’ t cash out these credits, they still pack a punch at tax time. As mentioned earlier, credits reduce your tax bill dollar for dollar, so they basically work like tax withholdings. coarse examples include :

  • 🏦  Saver’s Credit: Available to any taxpayers who make retirement contributions and whose income doesn’t exceed certain limits. The max credit available is $1,000.
  • 📚  Lifetime Learning Credit : Covers 20% of your education expenses up to $10,000, with a max credit of $2,000. 
  • 👪 Adoption Credit: Available to taxpayers pursuing adoption, with a max benefit per adoptive child of $14,440. Even though this credit is nonrefundable, it can be carried forward for up to 5 years and applied to future tax liabilities. 
  • 👶  Child and dependent care credit (2022 onward): Unless the 2021 changes get extended by congress, the dependent care credit will return to a max of $1,050 per child and will no-longer be refundable. 
  • 🌍  Foreign tax credit: This credit is available for taxpayers who pay tax on foreign income.

How to stay on top of your tax bill

Because freelancers and gig workers don ’ deoxythymidine monophosphate have an employer withholding their taxes for them, the IRS made it possible for taxpayers to make “ estimated tax payments ” throughout the class. Aren ’ t we lucky ?

Making estimated tax payments

Estimated tax payments are a way to “ pay as you go ” during the year. If you have a good set of records to work with, you can use your actual figures for the draw and plug them into a quarterly tax calculator to figure out what your following payment should be.

Estimated tax payments are due the fifteenth day following the conclusion of the quarter, so the payment schedule looks like this :

  • 1st quarter (Jan-Mar): Due April 15th
  • 2nd quarter (Apr-Jun): Due July 15th
  • 3rd quarter (Jul-Sep): Due October 15th
  • 4th quarter (Oct-Dec): Due January 15th 

Who should make estimated payments 

As a general principle, if you expect to owe less than $ 1,000, you ’ re off the addict for these. For everyone else, keep take.

The goal of estimated tax payments is to avoid getting hit with an underpayment penalty. underpayment penalties range from 3-5 % of your tax due, and are national to interest along with the rest of your unpaid poster. This penalty is evitable if :

  • You withheld at least 90% of the current tax due amount, or
  • You withheld 100% of the prior year tax due amount

If neither of the two apply to you and you expect to owe more than $ 1,000, you should be making calculate tax payments. immediately that you ’ ve made it to the end of this article, praise ! Learning is half the conflict. now go forth and file with confidence ! Sarah York, EA

websitetwitter-link Sarah is a staff writer at Keeper Tax and has her enroll Agent license with the IRS. Her work has been featured in Business Insider and Money Under 30. She has about a ten of public report have, and has worked with clients in a wide compass of industries, including vegetable oil and boast, manufacture, veridical estate, wholesale and retail, finance, and ecommerce. Sarah has extensive experience offering strategic tax planning at the submit and federal level. During her clock time in industry, she handled tax returns for C Corps, S corps, partnerships, nonprofits, and exclusive proprietorships. Sarah is a member of the National Association of Enrolled Agents ( NAEA ) and maintains her continuing education requirements by completing over 30 hours of tax train every year. In her spare time, she is a devoted cat ma and enjoys hike, baking, and overwatering her houseplants .

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