For most calculations Tax payments can be a tedious process during tax returns or to determine if the right amount of tax payments has been appropriately been subtracted from their income. Below is an income tax calculator that allows you to calculate your tax return entitlements.
Time needed: 10 minutes
How to Calculate Your Income Tax
- How do you calculate net income on a calculator?
Total Revenues – Total Expenses = Net Income
If your total expenses are more than your revenues, you have a negative net income, also known as a net loss. - How to net income example.
Costs might be listed under operating expenses. The general formula for net income could be expressed as Net Income = Total Revenue — Total Expenses
How to use the income calculator
Calculating gross monthly income if you’re paid hourly
First, to find your yearly pay, multiply your hourly wage by the number of hours you work each week and then multiply the total by 52. Now that you know your annual gross income, divide it by 12 to find the monthly amount.
Income in America is taxed by the federal government, most state governments, and many local governments.
Nine states — Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming — have no income taxes. New Hampshire, however, taxes interest and dividends, according to the Tax Foundation.
The federal income tax system is progressive, so the rate of taxation increases as income increases. Marginal tax rates range from 10% to 37%
Types Of Taxes You Can Calculate
Federal Income Taxes
These are taxes levied on all Americans as long as they live in the country. The federal personal income tax that is administered by the Internal Revenue Service (IRS) is the largest source of revenue for the U.S. federal government.
Taxes on What You Earn
Individual Income Taxes
An individual income tax (or personal income tax) is levied on the wages, salaries, investments, or other forms of income an individual or household earns.
Corporate Income Taxes
A corporate income tax (CIT) is levied by federal and state governments on business profits, which are revenues (what a business makes in sales) minus costs (the cost of doing business).
Businesses in the U.S. broadly fall into two categories: C corporations, which pay the corporate income tax, and pass-throughs—such as partnerships, S corporations,
Payroll Taxes
Payroll taxes are taxes paid on the wages and salaries of employees to finance social insurance programs. Most taxpayers will be familiar with payroll taxes by looking at their paystub at the end of each pay period. Where the amount of payroll tax withheld by their employer from their income is clearly listed.
Capital Gains Taxes
Capital assets generally include everything owned and used for personal purposes, pleasure, or investment, including stocks, bonds, homes, cars, jewelry, and art.
Whenever one of those assets increases in value—e.g., when the price of a stock you own goes up—the result is what’s called a “capital gain.”
