2023 Income Tax Calculator
PriorTax uses the personalized and most up-to-date income tax calculator to accurately estimate your federal income tax refund, or the tax you owe, in just a few short, easy steps. PriorTax income tax calculator will calculate a rough approximation of your tax refund or the amount you owe.
To find your estimated tax refund or amount due, it is first necessary to identify your eligible taxable income. Then, it can use the taxable income to calculate your average tax rate. Finally, the effective tax rate describes the average rate you will pay on taxes.
Calculating Your Tax Credit
Unlike deductions and adjustments, which are applied to your income, tax credits are applied directly to your tax liability, meaning the amount of taxes you owe. Some credits are refundable. Taxpayers can reduce their tax burden – and the amount of taxes they owe – by taking deductions and credits.
Calculating your Tax Deduction
Each deduction you claim can lower the amount of taxes you owe, leading to a lower tax bill overall. If your itemized deductions are smaller than the standard deduction, the PriorTax income tax calculator will use the standard deduction. Unfortunately, the standard deduction also does not allow for many itemized deductions, like state and local income taxes, business expenses, home mortgage interest, real estate taxes, etc.
Deductions for State and Local Taxes Paid, known as the SALT deduction, allows taxpayers to deduct up to $10,000 in the form of any property taxes paid by state and local governments, in addition to any income taxes paid by states or their sales taxes. If a taxpayer makes more than the amount allowed by the standard deduction, one must pay a higher amount under the AMT or the standard income taxes.
How PriorTax Income Tax Calculator Works
To begin using the income tax calculator, type your yearly salary into the salary box and steadily work through the rest. Once you complete the steps and are confident, you have entered all of the accurate information, hit the “Submit” button, which will show the breakdown of your taxes. Once you click the button, you will see an itemized breakdown of your tax payments for each year and a detail of those payments. PriorTax income tax calculator is based on the information you provide about your filing status, income, retirement contributions, withholding, deductions, and dependents.
Our income tax calculator accurately estimates the current year’s average tax rate as the federal income tax liability divided by total gross income. In addition, PriorTax income tax calculator automatically determines if standard or itemized deductions (based on your inputs) would produce more considerable tax savings and uses the larger of these two values in the estimated computation of taxes owed or due.
You can learn more about the thresholds and rates used by our income tax calculator. You may also be eligible to write off other items, like student loan interest or half your self-employment taxes, as you prepare your income tax return, effectively reducing your taxable income.