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, we’ll show you a quick way to estimate your taxes.   

How to calculate your taxes 

To capture the most accurate information about what you’ll owe in taxes, you’ll want to use the worksheets provided by the IRS and work with a tax professional. However, 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 get a general idea of what you might owe in income tax. 

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

• Your income 

• Any tax deductions you’re eligible for 

• Any tax credits you’re eligible for 

How to calculate your taxes 

To calculate 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, interest and other income.  

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 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 $22,000) will be taxed at 10 percent (for a total of $2,200), the next portion of their taxable income (up to $89,450) will be taxed at 12 percent, and so on.  

Then, you’ll add up the tax amount for each portion of your income.  

Here’s how this shakes out:  

How much will I get back in taxes?  

Whether you will owe taxes or get a refund will depend on how much you’ve already paid through withholding 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 W2 if you have it.)  

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

Your income tax bracket is determined by your taxable income for the year. To calculate your taxable   income, you’ll take your total income minus any deductions.  

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 is a little different. Generally, your employer will determine  How much tax to withhold on your bonus.  

How do I calculate my state taxes? 

Because taxes rules vary so much by state, it’s best to use resources provided by your state when trying to estimate what you’ll owe in state tax.  

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 as well.  

Will filing your taxes late impact your tax bill? 

If you’re expecting a refund, filing taxes late won’t have a monetary consequence—unless you wait more than three years to claim your refund. However, 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 factors related to your personal situation—like what deductions you're eligible for and what types of expenses you incurred that tax year.  

A financial professional can help 

If you’ve got more questions about the impact of your taxes, reach out to your financial advisor or tax advisor. An advisor can help you strategically plan to reduce the impact of taxes on your hard-earned income and make strategic decisions about saving for the future that keep tax law 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.