This calculator helps you estimate your federal tax liability and the amount you will have overpaid or underpaid at the end of the year quickly. The calculator does not include estimated self-employment tax, which you are required to pay with your federal income taxes.
Select your filing status as Single, Married filing Jointly or Separately or Head of Household. You can also choose to estimate your tax liability as a Trust.
Enter the total contributions you have made or expect to make for the year. For 2023, your total contributions to all traditional and Roth individual retirement accounts (IRAs) cannot exceed $6,500 per filer ($7,000 per filer if age 50 or older). Your total IRA contributions also cannot exceed your taxable compensation for the year.
Enter the number of your dependent children who were under age 17 at the end of the year and qualify you for the child tax credit.
Enter the number of your children age 17 or older at the end of the year who qualified as dependents or qualified dependents who are not your children.
Qualified dividends, long-term capital gains and certain other investment income are generally taxed at a lower rate than ordinary income. Enter income that qualifies for the investment income rate here.
Enter wages, ordinary dividends (not “qualified dividends), short-term capital gains and other income subject to ordinary income tax rates. Do not include income from pass-through organizations here, such as sole proprietorships or limited liability companies (LLCs).
Enter your total itemized deductions, including qualified mortgage interest, charitable contributions and nonbusiness property taxes. Your total deductible taxes (state/local and property) cannot exceed $10,000.
Enter net income after expenses from a sole proprietorship, LLC, partnership or other pass-through entity. Enter 100% of the entity’s income, even if you only own a partial interest in the entity.
Estimate the total company assets that will be reported on the partnership or other entity return for the end of the tax year. For a Sole Proprietorship, leave this blank.
Enter your interest in the company (0% to 100%). The total company pass-through income will be multiplied by this percentage.
Enter the total wages the company paid or will pay for the year.
Enter the amount of federal income tax withheld to date as shown on your last pay stub or online pay statement.
The primary factors that influence your federal income tax on a given amount of income are your income, filing status, deductions, other taxes, credits and tax withholding:
As a basic rule, the more money you make, the more federal income tax you will owe. If you earn a lower level of income, you may not owe any income taxes at all. As your income rises, it is taxed at higher percentages until your income tax may consume a significant portion of your earnings.
It is always better to make more money, even if it results in higher taxes. The marginal tax rate is always less than 100%, meaning you always keep part of each additional dollar you earn.
Choose the most advantageous filing status for which you qualify. For example, if you are single but may qualify to file as Head of Household, you will pay less tax by doing so.
Business deductions not only reduce your federal income tax but your self-employment tax as well. As a small business owner, you may deduct self-employed health insurance premiums and 50% of your self-employment tax.
You may also be able to itemize deductions, such as mortgage interest and charitable contributions.
You may owe other taxes, such as self-employment tax, Social Security and Medicare tax on unreported tip income, additional tax on IRAs or other tax-advantaged accounts or household employment taxes.
For small businesses, the most common additional tax paid with your individual income tax return is self-employment tax, which is not included in this estimator. Self-employment tax must be paid with quarterly estimated taxes and reported on your income tax return. To estimate your self-employment tax, use the self-employment tax calculator.
You may qualify for credits based on certain expenses, such as how many dependent children you have or child care expenses. You may also qualify for credits if you spent money on activities the federal government encourages, such as energy conservation or if you already paid taxes on certain income elsewhere.
Your employer withholds tax based on your wages or salary for a given time period, the information on your Form W-4, Employee’s Withholding Allowance Certificate and IRS withholding tables. You can see how much tax has been withheld in the most recent pay period and for the year so far by looking at your pay stub or online pay records.
The more money you make for each time period, the more tax your employer withholds. In theory, this should result in usually having close to the correct amount withheld. However, you may have significantly too much or too little withheld for many reasons. Here are some of the most common reasons for having too much or too little tax withheld:
Many taxpayers look forward to receiving large tax refunds when they file their returns every year. They may even feel they’ve “won” or received free money when they get a tax refund check for thousands of dollars.
The best way to win at tax withholding, however, is to have just the right amount of tax withheld from your pay or paid in estimated tax, to cover your tax liability. Having too much income tax withheld throughout the year is not the best use of your income. Meanwhile, you don’t want to owe a huge tax bill at the end of the year, either. Here are some pros and cons of having too much or too little tax withheld from your pay.