Tax Liability

Calculating Tax Liability

Canesha Abdulahi

AIU Online

October 21, 2014

Abstract

There are a lot of taxpayers who wish to use the convenience and advantage of filing their taxes electronically, allowing the companies to calculate their taxes for them. Even those people can choose to do their taxes by hand. When you are taking on this job, you will need the aid of an instruction booklet for the form you are filing. This guide will give you line by line instructions on completing your tax return. It will even provide you with the use of a tax rate table. This is a table provided by the IRS to help you figure out the exact amount of taxes owed.

Introduction

The act of responsibility of paying taxes is not an experience that is a pleasant one. The good thing is that the IRS makes calculating your income tax fairly easy. This is done by providing you with that years’ tax table. It is determining what your taxable income is that may be more complicated.

Instructions

1. Make sure that you finish all of the information on your federal income taxes. This must be completed in order for you to figure out the amount of your income that is taxable. This is the amount that you will enter into line 43 of your federal 1040 form. To get this amount you will need to subtract your deductions from your adjusted gross income.

2. You want to then look for you taxable income amount of the tax rate table that was provided from the IRS. For Mrs. Dunham, since the taxable income on line 43 of her tax return is $55,000, she will find that amount on the tax rate table locating where the table says “At least X amount but less than X amount”. There Mrs. Dunham will fine the line where her amount fits.

3. Lastly, Whatever Mrs. Dunham’s filing status is will determine what amount of taxes she owes. In Mrs. Dunham’s case, she has a filing status of married filing jointly. In the line where the client has entered her taxable income she will see four dollar amounts. The...