Free Tax Calculator Estimate Your Tax Refund & Tax Reform Impact
H&R Block's 2017 free income tax calculator is a simple tool to help you easily estimate your tax refund or how much you'll owe, plus your tax reform impact.
Federal Income Tax and You
Most of us have a responsibility to pay federal personal income tax, whether it is withheld from our paychecks or we mail it in ourselves. But how is income tax calculated? What does the tax return calculator consider? And can you lower the amount you owe? Read on to learn the ins and outs of federal tax!
Tax brackets are often confused with tax rates, but the terms aren't interchangeable. Each bracket holds an amount of income that applies to a tax rate between 10%-39.6%. In other words, if your income falls inside a certain bracket, it will be taxed under that bracket's rate. As your income grows, you move up higher in the tax bracket.
Filing status determines how much you owe in taxes and how much you get back. It can also impact deductions, credits, and exemptions. Your status will be one of the following: Single, Married Filing Jointly, Married Filing Separately, Head of Household, or Qualifying Widow(er) with Dependent Child. Select your status on the tax refund calculator.
Tax exemptions lower taxable income on your return. There are several types of exemptions you might be able to claim:
- Personal exemptions: Note that you can't claim this if you are a dependent.
- Exemptions for a spouse: If you file a joint return you can claim an exemption for your spouse. If you file separately, you can only claim an exemption if your spouse has no gross income, isn't filing his/her own return, and wasn't the dependent of another taxpayer.
- Exemptions for a child: You can claim a dependent exemption if they meet the qualifying child test.
Taxable Income (Adjusted Gross Income)
The vast majority of income types can be taxed, such as wages, salaries, tips, commissions, bonuses, vacation pay, sick pay, and severance pay. Winnings from gambling are also taxable. For a complete list of taxable income, click here!
Adjusted gross income (AGI) is your total gross income and income from other sources. Taxable income is adjusted gross income minus your deductions.
There are two ways to claim deductions, which can reduce your taxable income and therefore the amount of tax you owe. You can either claim standard deduction, or you can itemize your deductions. You'll want to figure out the benefits of both before you choose.
A tax credit is a dollar for dollar reduction of income tax based on what you're eligible for. They're only awarded in special circumstances. Some credits are even refundable, meaning you'll get paid that amount even if you don't owe income tax.
An example of a tax credit is the Adoption Credit, equal to expenses related to adopting a child.