Paying the correct amount of taxes is very important to all Americans. If a person is paying too little tax they can get in trouble with the state and federal government. If a person is paying too much tax they are shorting themselves on money they could be using for other purposes.
This tax calculator 2014 is a free and useful tool that can help a person calculate the correct amount of tax that they are responsible for paying . When using this tax calculator a person must first enter their filing status. This means they have to enter if they are filing as a single person, married with their spouse, or married but planning on filing income tax separately. A person can also enter if they are going to file as head of household. On the same page a person will enter the number of dependent they plan on claming.
After this information is filled in a person will then enter their total wages from their W2 form. This is the gross wages they get before taxes are taken out. A person will then enter if they experienced any capital gains or losses during the year. There is also a space to enter income from a business , real estate investment, or income from operating a farm. This is also the area to enter any additional income or any income a person may receive from social security of from unemployment.
After this information is entered a person is going to enter their planned deductions. This includes mortgage interest, real estate tax, and other taxes that have been paid during the year. Charitable donations are entered as well. If a person pays alimony or has an IRA this is also the place to put these dedications.
The calculator will then ask about any taxes that a person may have already paid. This include federal income tax withheld from the previous year, any estimate tax, earned income tax credits, and child dedications. If there are going to be additional deductions this information can also be entered in this section. If a person is going to file taxes with their spouse they are then able to enter their information in the tax calculator. Their income and amount of taxes they should be paying will be included in the final amount. After this information is entered the calculator will give the person an estimate amount of taxes that they should be paying. Some calculators will even show the difference in taxes that a person owes from one year to the next. It can show them if they are going to owe more tax in the upcoming year or if they are going to be paying less in taxes.
A tax calculatorcan give a person an very good estimate of their tax liability based on their income information. A free online calculator like this can help a person prepare for the income tax return season and take steps to figure out if they are going to have to pay the government and keep up on their taxes.