Learn How to Estimate Your Taxes With This Easy Worksheet

Before it comes time to file your taxes, you may be wondering how much you’ll owe or how much you’ll get back in federal taxes. Rather than waiting to file your full return, you can quickly estimate your taxes.

How to calculate your taxes

To capture the most accurate information about what you’ll owe in taxes, use the worksheets provided by the IRS and work with a tax professional. But sometimes it can be helpful to have a general idea of how much your tax bill (or tax refund) will be. We’ve put together a simple way to estimate what you might owe in income tax.

To use our simple worksheet, you’ll need to know:

• Your income sources subject to tax,
• Any tax deductions you’re eligible for, and
• Any tax credits you’re eligible for.

To estimate your taxes using our worksheet, you’ll first have to calculate your taxable income. You can do this by subtracting any deductions from your income—which includes wages, investment income and other income (such as retirement income and Social Security benefits).

Here’s an example of what this might look like for a married couple filing jointly with an annual income of $175,000:

Now that you have your taxable income, you can apply the IRS tax rates to your income to determine what you owe. But this is not quite as simple as it sounds.

The IRS calculates your income taxes in chunks (referred to as brackets), based on the amount of taxable income you have in each tax bracket. So, for our married couple, the portion of their taxable income up to $23,850 will be taxed at 10 percent (for a total of $2,385). The next portion of their taxable income, $23,851 to $96,950, will be taxed at 12 percent, and so on.

For easy reference, here are the tax brackets for 2025. You’ll see the most popular filing statues, which are single and married filing jointly:

Then, you’ll add up the tax amount from each applicable bracket your income falls into.

Here’s how this shakes out:

How much will I get refunded?

Whether you will owe taxes or get a refund will depend on how much you’ve already paid through withholding and estimated tax payments and how much you owe. Once you use our worksheet to calculate your taxable income, you can estimate what you owe and compare this number against what you’ve already paid. (That amount can be found on your pay stubs or a W-2.)

How do I know which tax bracket I’m in?

Your income tax bracket is determined by your taxable income for the year. The income tax bracket you are in depends on your taxable income. Whichever bracket the highest amount of your taxable income falls into is the bracket you are in. Referring back to the example above, the couple filing joint had taxable income of $143,500. They were in the 22 percent tax bracket because the highest bracket they were taxed at was 22 percent.

Is my bonus included in my taxable income?

Yes, your bonus is included in your total income for the year and taxed the same as your other wages. However, withholding on bonuses may be a little different, depending on whether it’s a separate payment or included with your regular paycheck. Your employer generally determines how much tax to withhold on your bonus.

If the bonus withholding rate exceeds the average tax rate on wages overall, you’ll get a refund for the excess withholding on the bonus. The reverse is also true—you could owe additional taxes when you file your return.

How do I calculate my state taxes?

Because taxes rules vary so much by state, it’s best to use resources from your state to estimate what you’ll owe in state taxes. For the states that have an income tax, most use federal adjusted gross income (commonly known as AGI) as the starting point, while a few use federal taxable income instead.

If you happen to live in one state and work in another, you’ll need to find out whether the two states have an agreement regarding income taxes. These “tax reciprocal agreements” simplify your tax obligations, but they apply only to income earned as an employee. If the states have a reciprocal agreement, you’ll pay taxes to the state in which you live. If no agreement exists, you’ll need to file a resident return in one state and a nonresident return in the other.

How can I minimize what I owe in taxes?

Though you can’t escape paying taxes, there are some tax planning strategies you can use to minimize the impact of taxes. Your financial advisor and/or a tax professional can give you guidance on this. In general, these strategies reduce your taxable income:

• Max out your 401(k): Contribute as much as you can to your employer-sponsored retirement account, up to the taxable limit.
• Max out your health savings account (HSA) contribution: If you are enrolled in a high-deductible health plan, contribute as much as you can to your HSA account ($4,400 – self coverage or $8,750 – family coverage).
• Tax-loss harvesting: If you are expecting capital gains income, work with a professional to sell an investment at a loss (if this makes sense), with the goal of offsetting the expected capital gain(s).
• Charitable giving: If you donate money or property to qualified tax-exempt organizations, you can claim a deduction on your tax return if you itemize deductions.
• Tax credits: There are various tax credits available to reduce your tax liability (for example, child tax credit, dependent care tax credit, education credit, etc.).

Will filing your taxes late impact your tax bill?

If you’re expecting a refund, filing taxes late won’t cost you—unless you wait more than three years to claim your refund. But if you owe taxes, you may have to pay added penalties for filing your taxes late.

Is it better to file your taxes jointly or separately?

If you’re married, there are many benefits to filing taxes jointly vs. separately. However, which option is better for you will really depend on your personal situation—like what deductions you’re eligible for and what types of expenses you incurred during the tax year.

While married filing jointly and married filing separately are the statuses that people often debate between, the IRS offers a few more tax filing statuses.

• If you’re single, legally separated or divorced from your spouse on the final day of the year, then you may file as single.
• If you were widowed within the last two years and have a dependent child, consider the qualifying surviving spouse status.
• If you’re a single parent with a qualifying child who lived with you most of the year, consider head of household status. It can also work for people who are divorced (or legally separated) and have primary custody of a child and unmarried people who have a dependent relative.

If you’re unsure which filing status is best, the IRS has an online interview tool.

A financial professional can help

If you have more questions about the impact of taxes on your financial situation, reach out to your Northwestern Mutual financial advisor or tax advisor. Your Northwestern Mutual advisor can even help connect you with a tax expert in your area. Ultimately, your financial advisor can help you strategically plan to reduce the impact of taxes on your hard-earned income and make informed decisions with tax laws in mind.

This publication is not intended as legal or tax advice. Financial representatives do not render tax advice. Consult with a tax professional for tax advice that is specific to your situation.